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
TheStreet Open House

5 Stocks Set to Soar off Bullish Earnings

RF Micro Devices

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

Get Adobe Flash player

My first earnings short-squeeze trade idea is semiconductor player RF Micro Devices (RFMD), which is set to release its numbers on Tuesday after the market close. Wall Street analysts, on average, expect RF Micro Devices to report revenue of $225.04 million on earnings of 3 cents per share.

During the last quarter, RF Micro Devices beat Wall Street estimates by 1 cent. The company has seen its income trend lower year over year by an average of 22.5% over the past five quarters. Revenue has trended down for the past three quarters.

The current short interest as a percentage of the float for RF Micro Devices is pretty high at 9.4%. That means that out of the 271.27 million shares in the tradable float, 25.62 million shares are sold short by the bears.

From a technical standpoint, RFMD is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been stuck in a nasty downtrend for the past couple of months. During that downtrend, the stock has dropped from $7.89 in October to a recent low of $4.41 a share. That recent low came on a large gap down in price on heavy volume. Shares of RFMD have started to rally a bit from that gap down to its current price of just under $5 a share.

If you're bullish on RFMD, I would get long after they report their earnings if the stock breaks out above some near-term overhead resistance at $5.17 a share on high-volume. Look for volume that's tracking in close to or above its three-month action of 7,524,560 shares. If we get that action, I would then look for RFMD to take out its 50-day moving average of $5.61 and re-test its 200-day moving average of $6.10, or possibly hit $6.50 a share.

I would avoid this stock completely from the long side If RFMD fails to break out over $5.17 a share with volume after its earnings report. A failure to break out should set this stock up to re-test that recent low of $4.41 and blow right through it. If RFMD losses $4.41 with volume post-earnings, then this stock could easily trade back toward its next major support zone at $3.65 a share.

As of the most recently reported period, RF Micro is one of the top holdings at Discovery Capital Management.

2 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from

  • 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