Another possible earnings short-squeeze trade is leading China-based maker of mobile phones and related products Zoom Technologies (ZOOM - Get Report), which is set to report results on Tuesday after the market close.. Wall Street analysts, on average, expect Zoom Technologies to report revenue of $99.72 million on earnings of 32 cents per share.
If you're looking for an under-$5 stock that could pop off a solid earnings report and guidance, then make sure to keep Zoom Technologies on your earnings trading radar.The current short interest as a percentage of the float for Zoom Technologies stands at 6.7%. That means that out of the 10.06 million shares in the tradable float, 552,833 shares are sold short by the bears. This stock has a very small float and a decent short interest. That said, we are going to need to see very solid results to kick off a short squeeze since this is a very speculative penny stock. >>3 Stocks Under $5 Trading at Huge Discounts From a technical standpoint, this stock is currently below its 50-day and 200-day moving averages, which is bearish. This stock recently spiked huge off its October low of $1.10 to a recent high of $2.50 in a very short timeframe. Since that big spike, the stock has slide back below its 50-day moving average and the selling volume has been picking up. That said, the stock still is holding above some short-term support zones near $1.55 to $1.50. If you're bullish on Zoom, I would wait until after it reports earnings and buy the stock if $1.50 holds and it starts to move back above its 50-day moving average of $1.87 with volume. Look for volume that's tracking in close to or above its three-month average action of 74,500 shares. If this stock can sustain a move above $1.87 with volume, then I would add to any long position once $2.14 is taken out. Target a run back toward $2.50 if the bulls step in and buy this name post-earnings. I would avoid this stock as an earnings short-squeeze play altogether if it fails to get back above the 50-day after earnings, or if it fails to hold that previous support at $1.50.