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Another possible earnings short-squeeze trade is leading China-based maker of mobile phones and related products
Zoom Technologies(ZOOM), 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.
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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.