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
TheStreet Open House

5 Stocks Set to Soar on Bullish Earnings

Stocks in this article: ACTGCBSTGHLATHNLTM

Athenahealth

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

Get Adobe Flash player

One potential earnings short-squeeze trade in the computer services complex is Athenahealth (ATHN), which is set to release numbers on Thursday after the market close. This company provides ongoing billing, clinical-related, and other related services to medical group practices primarily in the U.S. Wall Street analysts, on average, expect Athenahelath to report revenue of $103.79 million on earnings of 23 cents per share.

This company met Wall Street estimates last quarter after beating estimates in the prior two quarters. During the first quarter, Athenahealth reported a profit of 8 cents per share vs. Wall Street estimates of 8 cents per share. Revenue in the first quarter jumped 38.1% to $96.6 million from $69.9 million. This company is looking to register its fifth straight quarter of double-digit revenue growth. Athenahealth has averaged year-over-year revenue growth of 34.3% over the last four quarters.

The current short interest as a percentage of the float for Athenahealth is extremely high at 22.5%. That means that out of the 35.15 million shares in the tradable float, 7.85 million shares are sold short by the bears. Any solid earnings news out of this company could easily set off a large short-squeeze, since the short interest is so high and the float is very low.

From a technical perspective, ATHN is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the past six months, with shares soaring from a low of $55.10 to a recent high of $87.16 a share. During that uptrend, shares of ATHN have been consistently making higher lows and higher highs, which is bullish technical price action. During the past month, shares of ATHN have been trading range bound from $79.50 to $84.58 a share. A move outside of that range post-earnings should setup the next major trend for ATHN.

If you're in the bull camp on ATHN, then I would look for long-biased trades after earnings if this stock manages to trigger a near-term breakout above overhead resistance at $84.58 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 449,376 shares. If we get that move, then I would add to any long positions once ATHN takes out its 52-week high of $87.16 a share with high volume.

I would simply avoid ATHN or look for short-biased trades after earnings the stock fails to trigger that breakout, and then moves back below its 50-day moving average of $77.53 a share, and then below some more near-term support at $76.19 a share with heavy volume. If we get that action, then ATHN could easily drop towards its next major support zones at $71 to $69.34 a share, or possibly even toward its 200-day moving average of $66.33 a share.

5 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,601.48 +201.81 1.23%
S&P 500 1,939.65 +35.64 1.87%
NASDAQ 4,414.3530 +98.2790 2.28%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs