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TheStreet Open House

5 Earnings Stocks Poised to Pop

Stocks in this article: CJESFTKQUADOPTRASYS

Amtech Systems

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My final earnings short-squeeze idea is semiconductor player Amtech Systems (ASYS), which is set to release numbers on Thursday after the market close. This company engages in the design, assembly, sale, and installation of capital equipment and related consumables used in the manufacture of wafers, primarily for the solar and semiconductor industries. Wall Street analysts, on average, expect Amtech Systems to report revenue of $21.55 million on a loss of 22 cents per share.

This is another beaten-down heavily-shorted stock that could be worth a solid look for a short-squeeze rebound trade post-earnings. Shares of Amtech Systems have dropped a whopping 32% over the last six months. That massive move lower has this stock trading just 50 cents off its 52-week low of $6.84 as we approach its earnings report.

The current short interest as a percentage of the float for Amtech Systems is notable at 10.7%. That means that out of the 8.93 million shares in the tradable float, 954,642 shares are sold short by the bears. This stock has a decent short-interest and an extremely low float. A bullish report could easily set this stock off on a monster short-squeeze.

From a technical perspective, ASYS is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending lower since its February high of $11.60 to its current price of $7.33 a share. During that downtrend, ASYS has consistently been making lower highs and lower lows, which is bearish technical price action. That said, the stock has just started to stabilize and find some buying interest just below $7 a share.

If you're bullish on ASYS, I would wait until after its report and look for long-biased trades if this stock breaks out above some near-term overhead resistance at $7.54 and then its 50-day moving average of $7.86 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 118,998 shares. If we get that breakout, then look for ASYS to make a run at $9 to its 200-day moving average of $9.64 a share if the bulls gain full control of this stock post-earnings.

I would simply avoid ASYS or look for short-biased trades if it fails to trigger that breakout, and then drops below some major near-term support levels at $6.87 to $6.84 a share with high-volume. If we get that action, then I would target a drop towards $5 a share if the bears dump this stock 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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