One earnings short-squeeze candidate in the biotechnology and drugs complex is Seattle Genetics (SGEN), which is set to release numbers on Tuesday after the market close. This company focused on the development and commercialization of monoclonal antibody-based therapies for cancer. Wall Street analysts, on average, expect Seattle Genetics to report revenue of $52.33 million on a loss of 12 cents per share.
This company is looking to beat Wall Street estimates for the third quarter in a row. During the last quarter, Seattle Genetics beat Wall Street estimates with a loss of 24 cents per share versus a mean estimate of 30 cents. And in the prior quarter, the company reported a net loss of 35 cents per share. As we approach its earnings report, shares of Seattle Genetics are trading just a few points off its 52-week high of $22.40 a share.The current short interest as a percentage of the float for Seattle Genetics is extremely high at 27.4%. That means that out of the 114.86 million shares in the tradable float, 31.43 million are sold short by the bears. This is a huge short interest, so if Seattle Genetics can beat earnings estimates and raise forward guidance, then this stock could easily skyrocket post-earnings. >>5 Stocks Insiders Love Right Now From a technical perspective, SGEN is currently trading below its 50-day moving average and above its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong for the past six months, with shares soaring from a low of $14.61 to a recent high of $21.04 a share. That said, this stock has recently slipped back below its 50-day moving average of $19.19 a share, but it's still trading within range of a near-term breakout trade. If you're bullish on SGEN, I would look for long-biased trades after its report if this stock manages to break out above some near-term overhead resistance at $20.20 to $21.04 a share high-volume. Look for volume on that move that registers near or well above its three-month average volume of 1,122,660 shares. If we get that action, then SGEN should easily tag and possibly break out above its 2011 high of $22.40 a share. I would simply avoid SGEN or look for short-biased trades if the stock fails to trigger that breakout and then drops back below its 200-day moving average of $18.10 a share with heavy volume. If we get that action, target a drop towards $17 to $16 a share or possibly lower if the bears gain full control of this stock post-earnings.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV