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5 Stocks Set to Soar on Bullish Earnings

Tangoe

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My final earnings short-squeeze play today is software and programming player Tangoe (TNGO), which is set to release numbers on Tuesday after the market close. This is a global provider of on-demand communications lifecycle management software and related services. Wall Street analysts, on average, expect Tangoe to report revenue of $33 million on earnings of 8 cents per share.

Sales growth for Tangoe has registered between 56% and 59% during the past three quarter. Wall Street analysts are looking for earnings growth of 62% this year and 33% next year. As we approach its earrings report, shares of Tangoe are trading just a few points off its 52-week high of $21.74 a share.

The current short interest as a percentage of the float for Tangoe stands at 6%. That means that out of the 29.98 million shares in the tradable float, 1.76 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a decent short covering rally if Tangoe can deliver what the bulls are looking for.

From a technical perspective, TNGO is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares ripping higher from a low of $12 to a recent high of $21.74 a share. During that move, shares of Tangoe have consistently made higher lows and higher highs, which is bullish technical price action. Now this stock is trading within range of a near-term breakout trade.

If you're bullish on TNGO, I would wait until after they report and look for long-biased trades if this stock breaks out above some near-term overhead resistance at $21.60 to $21.74 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 595,122 shares. If we get that action, look for TNGO to pop toward $25 a share or higher if the bulls gain full control of this stock post-earnings.

I would simply avoid TNGO or look for short-biased trades if it fails to trigger that breakout, and then drops below its 50-day moving average of $19.08 a share on heavy volume. If we get that action, look for TNGO to potentially drop towards its next significant support levels at $16.94 to $15 a share if the bears hammer this stock 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.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
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