An earnings short-squeeze trade candidate is software and programming player Synchronoss Technologies (SNCR), which is set to release numbers on Tuesday after the market close. This company is a provider of multi-channel transaction management solutions to the communications services and digital content marketplaces. Wall Street analysts, on average, expect Synchronoss Technologies to report revenue of $61.55 million on earnings of 23 cents per share.
During the last quarter, this company improved gross margins by 4.8% and revenue rose 33.3%, while its costs of sales rose by 20.9% to $27.8 million. Overall, it met Wall Street estimates, so market players will be looking for beat this quarter.The current short interest as a percentage of the float for Synchronoss Technologies is extremely high at 18.7%. That means that out of the 23.74 million shares in the tradable float, 5.22 million are sold short by the bears. This is a very high short interest and low float situation that can spark a giant short-squeeze if the company can deliver what he bulls are looking for. From a technical perspective, SNCR is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock found big buying support a few months ago at around $27 to $27.58 a share, and since then it has soared to its current price of $34 a share. This monster uptrend puts SNCR within range of a major breakout post-earnings if the company can deliver strong earnings and bullish guidance. If you're bullish on SNCR, wait until after earnings and buy the stock once it takes out $35.72 to $35.90 with high-volume. Look for volume that's tracking in close to or above its three-month average volume of 308,102 shares. If we get that action, I would look for SNCR to challenge its 2007 highs near the low-to-mid-$40s. I would avoid any long trades or short SNCR after earnings if the stock fails to break out and then drops below some near-term support at $33 a share on heavy volume. I would target a drop back towards its 50-day moving average of $30.86 a share, or possibly much lower if the bears hammer this stock down post-earnings. Synchronoss is one of Goldman Sach's Top Tech Stocks for 2012.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- 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 + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV