The current short interest as a percentage of the float for Cubist Pharmaceuticals is very high at 17.1%. That means that out of the 61.31 million shares in the tradable float, 10.50 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.7%, or by about 377,700 shares. This stock has an extremely high short interest, so any bullish news could easily set off a giant short-squeeze.
From a technical standpoint, CBST is currently trading above both its 50- and 200-day moving averages, which is bullish. This stock has been uptrending very strong since it bottomed in August at $28.82 a share. During that uptrend, this stock has been consistently making higher highs and higher lows, which is bullish price action. Now the stock is very close to triggering a breakout trade if the bulls get the news they're looking for.
If you're bullish on CBST, I would get long after they report their earnings if the stock breaks out above $42.10 a share on high-volume. Look for volume that's tracking in close to or above its three-month action of 1,019,050 shares. If we get that action, I would look for a sharp spike higher in CBST by 15% or more.
I would only get short or avoid any long trades on CBST after they have released their earnings if the stock falls back below $39 on high volume. I would add to any short positions if the stock then takes out its 50-day moving average of $38.17 with volume. Target a drop back towards its 200-day moving average of $35.60 a share, or possibly lower if the bears whack this stock post-earnings.
Another potential earnings short-squeeze trade is
(ISRG - Get Report)
, which is set to report results on Thursday after the market closes. This company designs, manufactures and market da Vinci Surgical Systems, which are advanced surgical systems. Wall Street analysts, on average, expect Intuitive Surgical to report revenues of $483.72 million on earnings of $3.33 per share.