My first earnings short-squeeze idea is medical technology company Zeltiq Aesthetics (ZLTQ), which is set to report its numbers on Wednesday before the market open. There are currently no analyst estimates for Zeltiq Aesthetics since the company just came public on October.
This stock sets up perfectly as an earnings short-squeeze trade because shares are trading very close to a major breakout as we approach their quarterly report. A solid report could easily spark that breakout, so make sure to have this name on your earnings trading radar this week.>>5 Stocks Setting Up to Break Out The current short interest as a percentage of the float for Zeltiq Aesthetics is notable at 8.6%. That means that out of the 7.55 million shares in the tradable float, 686,859 shares are sold short by the bears. This small float and decent short interest is the exact recipe that can lead to a big short squeeze if the bulls get what they are looking for. From a technical standpoint, this has a very short trading history. Its low is $13.32, and its high is $17. The stock broke out once in November above some past overhead resistance at $16.03 and then ran up to that high of $17.41. With the stock currently trading at $16.30, it now sets up again to breakout off a solid earnings report. If you're bullish on this stock, I would look to get long after they report their results if the stock breaks out above $17.41 with strong volume. Look for volume that's tracking in close to or above its three-month average action of 391,672 shares. If we get that high-volume breakout post-earnings, then look for this stock to make a 10% to 20% spike higher. I think the breakout will spark a big move since the stock will be entering new high territory, and since its float is small and short interest is decent. Simply avoid trading this stock from the long side altogether if we fail to see that high-volume breakout after they have reported their results to the street.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
24/7 market commentary from Jim Cramer and 20+ veteran Wall Street gurus. Get access to the latest trading ideas on stocks, options, and ETFs as well as a real-time forum to see the pros exchanging their investment ideas.
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV