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My first earnings short-squeeze trade idea is medical equipment and supplies player
AngioDynamics(ANGO), which is set to report results on Thursday after the market close. This company designs, develops, manufactures, and markets various therapeutic and diagnostic devices that enable interventional physicians to treat PVD, tumors and other non-coronary diseases. Wall Street analysts, on average, expect AngioDynamics to report revenue of $52.97 million on earnings of 9 cents per share.
This company has met or beaten Wall Street estimates in the last four quarters. During the last quarter, AngioDynamics reported earnings per share of 9 cents vs. estimates of 8 cents per share. On June 24, this stock was downgraded by Canaccord Genuity from buy to hold and had its price target lowered from to $14.50 from $16.50. Canaccord said it's cautious on the stock until it sees synergies from its Navilyst acquisition.
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The current short interest as a percentage of the float for AngioDynamics stands at 6.5%. That means that out of the 15.12 million shares in the tradable float, 1.63 million shares are sold short by the bears. This is a decent short interest on a stock with a very low float. If AngioDynamics can manage to beat earnings estimates and raise its forward guidance, then the stock could see a solid short-squeeze post-earnings.
technical perspective, ANGO is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways for the past three months, between $11.35 on the downside and around $12.63 on the upside. A move outside of that range post-earnings will likely setup the next major trend for ANGO.
If you're in the bull camp on ANGO, then I would wait until after it reports earnings and look for long-biased trades if this stock can manage to trigger a break out its 50-day
moving average of $12.16 a share, and then above some overhead resistance at $12.55 to $12.63 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 95,083 shares. If we get that move, then ANGO has a great chance of re-testing and possibly taking out its 200-day moving average of $13.29 a share.
I would simply avoid ANGO or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops below some major
near-term support at $11.71 to $11.35 a share with high-volume. If we get that action, then ANGO should easily take out its next significant support level at $11.12 a share and possibly trend much lower.