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Another stock with the potential to see an earnings short squeeze is
Globe Specialty Metals(GSM), which is set to release results on Tuesday after the market close. This company, together with its subsidiaries, produces silicon metal and silicon-based alloys. Wall Street analysts, on average, expect Globe Specialty Metals to report revenues of $166.71 million on earnings of 31 cents per share.
During the previous quarter, this company reported earnings of 31 cents per share, which easily beat Wall Street estimates of 27 cents per share.
This is another name that's been beaten down big by the bears ahead of the quarter, with shares of Globe Specialty falling from $25.67 a share in mid-July to its current price of just over $17 a share. This big beatdown could set the stock up for a sharp rally if the bulls hear what they're looking for when the company reports.
The current short interest as a percentage of the float for Globe Specialty Metals sits at around 5.9%. That means that out of the 61.85 million shares in the tradable float, 3.74 million are sold short by the bears.
From a technical standpoint, this stock is trading below both its 50-day and 200-day moving average, which is bearish. This stock has recently formed a temporary double bottom at around $16.50 a share. I say temporary because we will have to see if this support zone holds up after they report earnings.
I would only be a buyer of this stock after they report if it breaks above $18.50 a share on strong volume. Look for volume that's close to or well above its three-month average action of 966,000 shares. I would add to any long positions if you see this stock trade above $20.62 and then $21.74 a share (200-day moving average) on solid volume. Target $22.50 to $24 a share of the bulls take full control of this stock.
I would only short this name after they report if the stock drops below that near-term support at around $16.50 a share on heavy volume. I would add to any short positions if it then drops below $14 a share and look for a near-term target of $13 to $12 a share.