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One potential earnings short-squeeze play in the software and programming complex is
OPNET Technologies(OPNT), which is set to release numbers on Monday after the market close. This company is a provider of application and network performance management solutions. Wall Street analysts, on average, expect OPNET Technologies to report revenue of $44.79 million on earnings of 21 cents per share.
OPNET is another severely beaten-down heavily-shorted stock. So far in 2012, it has been destroyed by the sellers with shares falling over 35%. Traders should now keep an eye on this stock for a potential of short-squeeze and rebound trade off these oversold conditions post-earnings.
The current short interest as a percentage of the float for OPNET Technologies is notable at 8.3%. That means that out of the 14.92 million shares in the tradable float, 1.23 million shares are sold short by the bears.
From a technical perspective, OPNT is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has dropped hard from its February high of $38.47 to a recent low of $22.10 a share.
Since that big-time selloff, OPNT has now started to trend sideways between $24 and $22 a share. A move outside of that sideways trading pattern post-earnings should set this stock up for its next big trend.
If you're a bull on OPNT, then I would wait until after they report and look for long-biased trades if this stock can break out above $24 a share with high-volume. Look for volume on that move that registers close to or above its three-month average action of 238,573 shares. If we get that action, then I would add to any long positions in OPNT if it takes out its 50-day moving average of $26.16 a share with volume.
I would avoid OPNT or look for short-biased trades if the stock fails to trigger that move, and then drops below that major near-term support at $22 a share with high-volume. Target a move toward its next significant support zone at $17.50 a share if the bears gain full control of this stock post-earnings.