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One earnings short-squeeze play in the oil well services and equipment complex is
Helix Energy Solutions(HLX - Get Report), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Helix Energy Solutions Group to report revenues of $330.87 million on earnings of 35 cent per share.
This company met Wall Street estimates last quarter after beating them the prior two. During the third quarter, Helix Energy Solutions reported a profit of 43 cents per share vs. a mean estimate of net income of 43 cents per share. In the second quarter, they beat estimates by 21 cents. A year-over-year revenue decline in the third quarter followed a streak of three straight quarters of revenue increases.
The current short interest as a percentage of the float for Helix Energy Solutions Group sits at 7%. That means that out of the 98.05 million shares in the tradable float, 6.83 million are sold short by the bears. The bears have also been increasing their short positions from the last reporting period by 3.4%, or by about 226,400 shares.
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From a technical perspective, HLX is currently trading above both its 50-day and 200-day moving average, which is bullish. This stock recently bounced off its 50-day moving average near $16, and then soared to its current price of just over $19.40 a share. This stock is now within range of triggering a major breakout post-earnings if the company can deliver strong results.
If you're bullish on HLX, I would look for long-biased trades after it reports earnings if it can manage to break out above some near-term overhead resistance at $19.69 a share with strong volume. Look for volume that registers near or above its three-month average volume of about a million shares. If we get that action, look for HLX to re-test its 52-week high of $21.65 a share, or possibly trend much higher.
I would simply avoid HLX or look for short biased trades if the stock fails to breakout after they report earnings, and then drops below some near-term support at $18 with volume. Target a drop back towards the 50-day moving average of $16.80 a share, or possibly much lower if the bears hammer this stock down post-earnings.