Silicon Graphics International
One earnings short-squeeze idea in the computer systems complex is high-end computer servers and storage systems developer Silicon Graphics International (SGI), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Silicon Graphics to report revenue of $163.79 million on earnings of 4 cents per share.
This is a heavily shorted stock that's trending strong heading into the quarter, since shares have been making higher highs and higher lows since hitting a low of $10.45 in October. This stock now sets up to break out after earnings if the company can deliver solid earnings and bullish guidance. tThe current short interest as a percentage of the float for Silicon Graphics is an extremely large 24.3%. That means that out of the 28.66 million shares in the tradable float, 7.48 million are sold short by the bears. The short-sellers have also been increasing their bets from the last reporting period by 4.1%, or by about 292,200 shares. The bears could be pressing into the quarter, so look for any strength after the report to long this name.From a technical standpoint, this equity is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. During the past six months, this stock has been finding buying support at $11 to $10.50 a share and selling pressure anywhere above $16 a share. The way I would play this stock is to wait until after its report and buy if it trades back above its 200-day moving average of $15.75 on strong volume. Look for volume that's tracking in close to or above its three-month average action of 654,700 shares. If that level is taken out, I would then add to any long position once the stock moves above $17 to $17.71 a share on strong volume. Target a run back towards $19 to $23 if the bulls push this higher post-earnings. I would only get short this stock after they report earnings if it drops below its 50-day moving average of $13.85 a share on heavy volume. I would add then add to any short position if $11.90 is taken out with volume. I would target a drop back towards $10.50 a share or possibly even lower if the bears whack this lower post-earnings. Silicon Graphics shows up on a list of 7 Tech Stocks With Limited Downside.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV