This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
One more earnings short-squeeze play is
DemandTec(DMAN), which is set to release numbers on Thursday after the market close. This is a provider of on-demand optimization solutions to retailers and consumer products companies. Wall Street analysts, on average, expect DemandTec to report revenue of $22.02 million on a loss of 2 cents per share.
Barrington Research has issued a research report on DemandTec ahead of the quarter maintaining its outperform rating and $7.50 price target on the stock. This stock has been absolutely crushed in the past six months with shares dropping from a May high of $11.06 to its current price of just over $6 a share.
The current short interest as a percentage of the float for DemandTec stands at 7.3%. That means that out of the 29.52 million shares in the tradable float, 2.31 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 9.2%, or by about 5.6 million shares. It's worth pointing out that the bears have also been increasing their bets from the last reporting period by 4.4%, or by about 97,700 shares.
From a technical standpoint, this stock is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock is the poster child for a bearish trending equity since shares have been printing lower highs and lower lows since April. That said, the stock has started to find some buying support recently at around $5.40 to $5.50 a share.
The way I would play this stock is to buy some shares after it releases its results if the stock can trade above its 50-day of $6.45 and above some
overhead resistance at $7 a share. Look for volume that's tracking in close to or above its three-month average action of 363,300 shares. This stock could run up towards $8 a share or possibly higher if the bulls can spark a solid short-squeeze.
I would get short this stock after earnings only if the stock fails to trade back above at its 50-day moving average. I would add to any short position once the stock then trades below $5.40 to $5.25 a share on heavy volume. Target a drop back below $5 or possibly even lower if the bears can push this stock lower post-earnings.
To see more potential earnings short squeeze candidates, including
Texas Industries(TXI) and
Mosaic(MOS), check out the
Earnings Short Squeeze Plays portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.