This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Earnings Short-Squeeze Trades

Stocks in this article: PLXS CREE ADTN DGII GMT FAST EZPW XLNX

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Cree

Another potential earnings short-squeeze trade is Cree (CREE), set to report results on Tuesday after the market close. This company develops and manufactures semiconductor materials and devices primarily based on silicon carbide, gallium nitride and related compounds. Wall Street analysts, on average, expect Cree to report earnings of 26 cents per share on revenues of $309.85 million.

This company has been inconsistent with earrings, wavering between beating and failing to beat Wall Street estimates during the past fiscal year. That earnings inconsistency has even lead one firm, Wunderlich to recently say that estimates for Cree remain too high.

The current short interest as a percentage of the float for Cree is very high at 13.4%. That means that out of the 112.54 million shares in the tradable float, 15.12 million are sold short by the bears. If Cree can manage to show that their earnings results are back on track, then this stock could easily see a big short-squeeze since there are many bears involved in the stock.

From a technical standpoint, CREE is currently trading below both its 50-day and 200-day moving averages, which is bearish. The stock recently put in a near-term bottom at $20.25 a share, and since then it has started to uptrend toward its current price of $23.52. During that uptrend, CREE has been making higher lows and higher highs, which is bullish price action. That said, the stock won't look really bullish until it can breakout above some key near-term resistance levels.

If you're bullish on CREE, I would wait until after they report their results and buy the stock once it breaks out above $23.92 and above its 50-day moving average of $24.48 with heavy volume. Look for volume that's tracking in close to or above its three-month average action of 3.1 million shares. If we get that high-volume breakout post-earnings, then look for CREE to trade back toward its next significant overhead resistance level at $26.02 a share. I would add to any long positions if that level is then taken out with volume.

I would avoid any long trades or get short CREE after earnings if it fails to clear its 50-day with volume. If that level holds up as resistance, then I would get short and add to any short positions once CREE takes out $21.38 with volume. Target a drop back toward $20.25, or possibly much lower if the bears hammer this stock post-earnings.

3 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,674.01 +317.14 1.83%
S&P 500 2,045.87 +32.98 1.64%
NASDAQ 4,722.4210 +78.1090 1.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs