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My first earnings short-squeeze candidate today is equipment rental company
United Rentals(URI - Get Report), which is set to report results on Tuesday after the market close United Rentals operates in two segments: general rentals and trench safety, power and HVAC. Wall Street analysts, on average, expect United Rentals to report revenue of $1.08 billion on earnings of 57 cents per share.
During the last quarter, United Rentals reported revenue of $656 million and GAAP sales 25% higher than the previous quarter's $523 million. The current short interest as a percentage of the float for United Rentals is rather high at 12.7%. That means that out of the 63.40 million shares in the tradable float, 11.84 million shares are sold short by the bears.
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a technical perspective, URI is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock recently sold off from its April high of $47.98 to a low of $29.07 a share. Following that selloff, shares of URI have started to rebound and make higher lows with the stock trading at around $34 a share. If shares of URI can now manage to trigger a near-term breakout trade post-earnings, then this stock will setup for higher highs, which is bullish technical price action.
If you're in the bull camp on URI, 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 above some near-term overhead resistance at $36.20 to $38.53 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 3.55 million shares. If we get that move, then URI will be trending back above its 50-day
moving average of $35.28 a share, and the stock will have a great chance of trading up towards its next significant overheard resistance level at $44.75 a share.
I would simply avoid URI or look for short-biased trades if after earnings it fails to
trigger that breakout and then drops below some near-term support at $31.57 a share high-volume. If we get that move, then URI could easily drop notably lower and take out that recent low of $29.07 a share post-earnings.