Another potential earnings short-squeeze trade is Internet-based postage solutions player Stamps.com (STMP), which is set to report results on Thursday after the market close. Wall Street analysts, on average, expect Stamps.com to report revenue of $26.62 million on earnings of 25 cents per share.
If you're looking for a stock that's uptrending extremely strong heading into the quarter, then make sure to look at shares of Stamps.com. This stock is up 23% so far in 2012, and it's now trading just one point off its 52-week high of $33.73 as we move closer to their report.The current short interest as a percentage of the float for Stamps.com is rather high at 12.9%. That means that out of the 12.57 million shares in the tradable float, 1.69 million shares are sold short by the bears. This is a low float high short interest situation, so look for STMP to skyrocket post-earnings if the company gives the bulls what they're looking for. From a technical perspective, STMP is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock recently formed a double bottom at around $23 a share, and since then it has trended higher towards its current price of $32.33 a share. This strong uptrend now puts the stock within range of triggering a big breakout post-earnings. If you're bullish on STMP, I would wait until after it report its results and buy the stock once it breaks out above $32.91 to $33.73 with high-volume. Look for volume that's tracking in close to or above its three-month average volume of 363,365 shares. If we get that move, I expect to see STMP rip higher by 10% or more after the report. I would avoid any long trades or short STMP after their earnings report if the stock fails to break out and it moves back below some near-term support at $30.10 on high volume. I would target a drop back towards its 50-day moving average of $27.57 a share, or possibly much lower towards $24 to $23 a share if the bears slam this stock post-earnings. Stamps.com is one of TheStreet Ratings' top-rated Internet stocks. I also featured it recently in "8 Stocks Rising on Monster Volume."
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