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TheStreet Open House

5 Stocks Set to Soar off Bullish Earnings


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Another potential earnings short-squeeze play is Rovi (ROVI), which is set to report results on Tuesday after the market close. Rovi focuses on powering the discovery and enjoyment of digital entertainment providing companies a broad set of integrated solutions. Wall Street analysts, on average, expect Rovi to report revenue of $197.94 million on earnings of 61 cents per share.

This company missed estimates last quarter after beating estimates in the previous quarter. In the second quarter, Rovi reported a profit of 41 cents per share versus estimates of 49 cents. Two quarters ago, they beat analysts' expectations by 9 cents with a net income of 50 cents. Revenue has trended higher for the past three quarters. Their loss in the last quarter came after three straight quarters of a profit.

The current short interest as a percentage of the float for Rovi stands at 8.3%. That means that out of the 109.60 million shares in the tradable float, 9.19 million are sold short by the bears. It's worth mentioning that the bears have been increasing their bets from the last reporting period by 6.3%, or by about 541,300 shares.

>>5 Beaten-Down Tech Stocks Poised to Rebound

From a technical standpoint, this stock is currently below its 200-day moving average and right at its 50-day moving average, which is neutral trendwise. This stock plunged from its July high of $59.31 to a recent low of $38.79 a share. Since hitting that low, the stock has rebounded to its current level of just over $46.

If you're bullish on this name, I would wait until after they report and buy the stock once it trades above $48.78 and then $52.45 (its 200-day moving average) on heavy volume. Look for volume that's tracking in close to or above its three-month average action of 1.34 million shares. If those levels are taken out, I would target a run back toward $58 to $59 a share.

I would get short this stock after it reports earnings only if it fails to get back above its 50-day moving average of $46.51 a share. If this stock fails to get back above the 50-day post-earnings, then I would short off any weakness and target a drop back toward that 52-week low of $38.79.

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