This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

4 Stocks Set to Soar on Bullish Earnings


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Another potential earnings short-squeeze play is technology player Xyratex (XRTX), which is set to release its numbers on Thursday after the market close. This company is a provider of data storage technology, including modular solutions for the enterprise data storage industry and hard disk drive capital equipment for the HDD industry. Wall Street analysts, on average, expect Xyratex to report revenues of $327.03 million on earnings of 29 cents per share.

Last Tuesday, Cantor Fitzgerald started coverage on this stock with a hold rating and a price target of $12 a share. This stock has been beaten down hard heading into its quarterly report, since shares have dropped over 28% in the last three months.

The current short interest as a percentage of the float for Xyratex sits at 5.3%. That means that out of the 27.31 million shares in the tradable float, 1.45 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 43.9%, or by about 443,600 shares. If the shorts are caught pressing too hard into the recent sharp decline, then we could easily see a snapback short-covering rally for XRTX post-earnings.

>>5 Big Stocks Set to Slingshot Higher

From a technical perspective, XRTX is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending hard during the last four months, with shares dropping from its March high of $17.96 a share to its recent low of $10.52 a share. During that big move lower, shares of XRTX have been making lower highs and lower lows, which is bearish technical price action. That said, the stock has started to trend sideways during the last month and change, between $10.52 and $12.26 a share. A move outside of that range post-earnings will likely setup the next major trend for XRTX.

If you're in the bull camp on XRTX, then I would wait until after it reports numbers and look for long-biased trades if this stock can manage to take out some near-term overhead resistance at $12.26 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 349,702 shares. If we get that action, then XRTX could easily tag its 200-day at $13.87 or possibly some more overhead resistance at $14.94 post-earnings.

I would simply avoid XRTX or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then takes out some major near-term support at $10.63 to $10.52 a share with high volume. If we get that action, then XRTX could easily trade back toward $9 to $8 a share if the bears whack this stock lower post-earnings.
3 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
XRTX $13.24 0.08%
AA $11.17 0.00%
ISCA $33.49 0.00%
PSMT $86.54 0.00%
AAPL $93.74 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs