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My first earnings short-squeeze trade candidate is software and programming player
Saba Software(SABA), which is set to release its numbers on Thursday after the market close. This company provides a class of people systems that combine people learning, people performance, and people collaboration solutions. Wall Street analysts, on average, expect Saba Software to report revenue of $33.27 million on a loss of 4 cents share.
If you're looking for a small-cap stock that's uptrending strong heading into its earnings report, then make sure to check out shares of Saba Software. This stock is up a whopping 60% so far in 2012, and shares are trading within shouting range of its
52-week high of $13.11.
The current short interest as a percentage of the float for Saba Software is notable at 6.4%. That means that out of the 28.18 million shares in the tradable float, 1.64 million shares are sold short by the bears. The bears have also been increasing their short positions from the last reporting period by 27%, or by about 350,000 shares.
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technical perspective, SABA is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been on a tear uptrending strong for the last six months from $5.07 in October towards its current price of just under $13 a share. During that uptrend, SABA has consistently made higher lows and higher highs, which is bullish price action.
If you're bullish on SABA, I would wait until after its report and look for long-biased trades if this stock breaks out above some near-term overheard resistance at $13.11 or if it a makes a new 52-week high with volume. Look for volume that's near or well above its three-month average action of 290,694 shares. If we get that action, then look for this stock to quickly hit $15 a share or higher post-earnings.
I would simply avoid SABA or look for short biased trades if after earnings this stock fails to break out over $13.11 and make new 52-week highs. Target a drop back towards its 50-day
moving average of $11.36 or lower if you see high-volume sellers come into this name post-earnings.