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My final earnings short-squeeze idea for today is computer services player
Qihoo 360 Technology(QIHU - Get Report), which is set to release numbers on Tuesday after the market close. This company is engaged in the operations of Internet services and sales of third party anti-virus software in the People's Republic of China. Wall Street analysts, on average, expect Qihoo 360 Technology to report revenue of $60.47 million on earnings of 17 cents per share.
The current short interest as a percentage of the float for Qihoo 360 Technology is extremely high at 22.1%. That means that out of the 44.19 million shares in the tradable float, 13.05 million are sold short by the bears. This is a very high short interest on a stock with a relatively low tradable float. If Qihoo 360 Technology can report a solid quarter and raise its forward guidance, then this stock could skyrocket post-earnings.
From a technical perspective, QIHU is currently trading right 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 five months, with shares moving sharply higher from a low of $13.71 to a high of $26.35 a share. After hitting that high, shares of QIHU have struggled to get above $26.30 to $25 a share, with sellers coming in to drive the stock lower whenever it trades near those levels. Shares of QIHU recently moved back below its 50-day moving average of $22.19 with high volume.
If you're in the bull camp on QIHU, I would wait until after its report and look for long-biased trades if this stock manages to trade above some near-term overhead resistance at $21.72, and its 50-day moving average of $22.91 a share with high-volume. Look for volume on that move that's near or well above its three-month average action of 2,093,890 shares. If we get that move, then QIHU has a good chance to re-test that significant overhead resistance at $25 to $26.30 a share if the bulls gain full control of this stock post-earnings.
I would simply avoid QIHU or look for short-biased trades if it fails to trigger that move over $21.72 to $22.91 a share, and then drops below some major near-term support levels at its 200-day moving average of $19.71 to $18.80 a share with high-volume. If we get that action, then I would target a drop back towards $16 to $15 a share or possibly lower 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.