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TheStreet Open House

5 Stocks Set to Soar on Bullish Earnings

Stock quotes in this article: MITK, SCSS, SNCR, AFFX, AKAM


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Another earnings short-squeeze candidate is Akamai (AKAM), which is set to release numbers on Wednesday after the close. This company provides services for accelerating and improving the delivery of content and applications over the Internet in the U.S. and internationally. Wall Street analysts, on average, expect Akamai to report revenue of $311.26 million on earnings of 40 cents per share.

For the last four quarters, Akamai has registered double-digit year-over-year percentage revenue growth. The highest growth was seen in the fourth quarter of last year at 19.5%, and the average growth was 14.6%. The company's net income has trended higher for three straight quarters.

The current short interest as a percentage of the float for Akamai is decent at 4.7%. That means that out of the 174.09 million shares in the tradable float, 8.16 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.5%, or by about 424,000 shares.

From a technical perspective, AKAM is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending very strong to the upside since it hit a low in October at $18.25 to its current price of just over $33 a share. This strong uptrend has now setup AKAM for a big breakout trade post-earnings if the company can deliver a strong quarter and bullish guidance.

If you're bullish on AKAM, I would wait until after they report earnings and the stock if it manages to break out above $34.24 to $35.83 a share on big volume. Look for volume that's tracking in close to or above its three-month average action of 4,221,240 shares. If we get that high-volume breakout, then I would look for AKAM to fill a major gap down in price from last May that started at over $40 a share.

I would only get short or avoid AKAM after earnings if it fails to break out and then trades below 31 to $30.45 (50-day) on high-volume. Target a drop back towards its 200-day moving average of $28.18 a share, or possibly much lower if the bears do a number on this name post-earnings.

Akamai shows up on a list of 21 Stock Picks That Experts Agree On.

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