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Another earnings short-squeeze trade is semiconductor player
Amkor Technology(AMKR - Get Report), which is set to release numbers on Thursday after the market close. This company is a provider of outsourced semiconductor packaging (assembly) and test services. Wall Street analysts, on average, expect Amkor Technology to report revenue of $686.36 million on earnings of 7 cents per share.
Revenue has trended down for Amkor in the past two quarters. During the third quarter, revenue came in at $740 million, or 6.8% lower than a year-ago. IN the quarter before that, revenue dropped 8.2%. The current short interest as a percentage of the float for Amkor Technology is very high at 14.8%. That means that out of the 82.84 million shares in the tradable float, 13.17 million shares are sold short by the bears.
From a technical perspective, AMKR is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock formed a double bottom last December at $4.06 to $4.07 a share. After marking that bottom, the stock skyrocketed towards its current price of $5.99 a share. Now the stock is within range of a near-term breakout if the company can report solid earnings and bullish guidance.
If you're bullish on AMKR, I would wait until after it reports earnings and buy the stock if it breaks out above $6.15 a share with high-volume. Look for volume that's tracking in close to or above its three-month average volume of 1,457,920 shares. If we get that action, I would then add to any long positions once AMKR takes out more overhead resistance at $6.59 a share. Target a run towards $7 to $7.50 if the bulls gain control of this stock post-earnings.
I would simply avoid any long trades or look to short AMKR if the stock fails to break out above $6.15 post-earnings. Target a drop back towards the 200-day moving average of $5.18 a share, if some near-term support at $5.60 gets taken out with heavy volume.
To see more potential earnings short squeeze plays, check out the
Earnings Short Squeeze Plays portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.