5 Stocks Set to Soar off Bullish Earnings

Amtech Systems

Another earnings short-squeeze candidate is semiconductor equipment maker Amtech Systems (ASYS), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Amtech Systems to report revenue of $54.29 million on earnings of 29 cents per share.

This stock is trading right near some previous support levels at $9.40 to $9.60 a share as we head into the quarter. If the stock can hold above those levels and above its 50-day moving average of $9.75 after earnings, then shares could spike and break out.

The current short interest as a percentage of the float for Amtech Systems stands at 6.9%. That means that out of the 9 million shares in the tradable float, 624,182 shares are sold short by the bears. This stock has a decent short interest and a very small float. Any good earnings news could set off a solid short squeeze for the bulls.

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From a technical standpoint, this stock is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock recently dropped big from its July high of $21.65 to a recent low of $7.12 a share. The stock has now started to trade sideways for the past few months between $11.60 and around $8.60 a share. A move outside of that range will set the stock up for its next big trend.

If you're bullish on this stock, I would wait until after earnings are reported and buy the stock once it breaks out above $11.60 on big volume. Look for volume that's tracking in close to or above its three-month average action of 243,500 shares. I would then add to any long position once the stock takes out $14 with volume. That should set up ASYS to fill some of a recent gap down in price from back in August.

I would only get short this stock after earnings are reported if it trades below $9.40 share on heavy volume. I would add to any short position once $8.60 is then taken out, and target a drop back towards that recent low of $7.12.

To see more potential earnings short squeeze plays, including Hot Topic (HOTT), Zoll Medical (ZOLL) and E Commerce China Dangdang (DANG), check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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