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One earnings short-squeeze play in the communications services complex is
J2 Global(JCOM - Get Report), which is set to release numbers on Tuesday after the market close. This company provides cloud-based, value-added communication, messaging and data backup services to businesses of all sizes, from individuals to enterprises. Wall Street analysts, on average, expect J2 Global to report revenue of $85.83 million on earnings of 63 cents per share.
This company missed Wall Street estimates last quarter, so investors will be looking for a better showing this time around. J2 Global's profits have trended higher year over year by an average of 52% over the past five quarters. The stock is trading just three points off its
52-week high of $32.67 as we head into their quarterly earnings report.
The current short interest as a percentage of the float for J2 Global is very high at 21.9%. That means that out of the 44.53 million shares in the tradable float, 9.76 million are sold short by the bears. This is a low-float/high short-interest situation, so if J2 Global can produce bullish results the stock should see a big short squeeze.
technical perspective, JCOM is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock found big buying support over the last couple of months and change at around $26 to $26.50 a share. Since finding that support, the stock has run up to its current price of just over $29 a share. That move now sets up JCOM to potentially trigger a big breakout post-earnings.
If you're bullish on JCOM, I would wait until after its report and look for long-biased trades once it breaks out above $29.87 a share with high-volume. Look for volume that's tracking in close to or above its three-month average volume of 427,523 shares. If we get that action, I would target a run back towards that 52-week high of $32.67, or possibly much higher.
I would only look for short-biased trades or just avoid JCOM if after earnings it fails to breakout above $29.87 a share, and then drops below both its 50-day of $27.83 and 200-day of $28.38 moving averages with volume. If we get that action, target a drop back towards $26 to $25 a share, or possibly much lower if the bears knock this down post-earnings.
J2, one of the
top-rated Internet stocks, is also one of the
top-yielding Internet stocks.