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My final earnings short-squeeze trade idea is software and programming player
Callidus Software(CALD - Get Report), which is set to release numbers on Wednesday after the market close. This company is a provider of sales performance management software and services. Wall Street analysts, on average, expect Callidus Software to report revenue of $22.61 million on a loss of 1 cent per share.
If you're looking for a heavily-shorted small-cap technology stock that's trading within range of a big breakout move following its earnings report, then make sure to check out shares of Callidus Software. Shares of Callidus Software are up 23% so far in 2012 and this stock is just 30 cents off its 52-week high of $8.24 a share.
The current short interest as a percentage of the float for Callidus Software is rather high at 14.5%. That means that out of the 28.63 million shares in the tradable float, 4.11 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 7.4%, or by about 282,000 shares. The bulls could easily see a big short-squeeze here since CALD is heavily-shorted and uptrending near new highs ahead of its report.
From a technical perspective, CALD is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong heading into its earnings report, with shares ripping higher form a recent low of $4.48 to a high of $8.24 a share. During that move, shares of CALD have managed to find buying interest almost every time it's pulled back near its 50-day moving average. Now this stock is trading very close to triggering a major breakout trade post-earnings.
If you're bullish on CALD, I would wait until after its report and look for long-biased trades if this stock breaks out above $8.00 to $8.24 a share with high-volume. Look for volume on that move that's near or well above its three-month average volume of 314,252 shares. If we get that action, look for CALD to continue its uptrend towards $10 a share in the near-term.
I would simply avoid CALD or look for short-biased trades if it fails to trigger that breakout, and then drops below some near-term support at its 50-day moving average of $7.60 and more support at $7.06 a share with heavy volume. If we get that action, look for CALD to trend lower towards its next significant support levels at $6.35 to $5.50 a share if the bears hammer this down post-earnings.
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.