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
Another potential earnings short-squeeze trade is biotechnology player
Questcor Pharmaceuticals(QCOR), which is set to release its numbers on Tuesday after the market close. This company primary product is H.P. Acthar Gel, is an injectable drug that is approved by the U.S. Food and Drug Administration, for the treatment of 19 indications. Wall Street analysts, on average, expect Questcor Pharmaceuticals to report revenue of $108.91 million on earnings of 63 cents per share.
If you're looking for a beaten-down heavily-shorted stock head into its earnings report this week, then make sure to take a strong look at shares of Questcor Pharmaceuticals. During the last month, this stock has dropped over 17% with shares falling from a high of $58.91 to a low of $41.60 a share.
>>22 Biopharma Stocks With Breakout Potential
The current short interest as a percentage of the float for Questcor Pharmaceuticals is extremely high at 28.2%. That means that out of the 59.65 million shares in the tradable float, 16.63 million shares are sold short by the bears. If Questcor Pharmaceuticals can manage to report a solid quarter and give the bulls the news they're looking for, then we could easily see a sharp rebound and short-squeeze develop.
From a technical perspective, QCOR is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. Following that massive selloff from earlier this month that took QCOR from over $58 to $41 a share, this stock has been trading range bound from $42 to $44.48 a share. A move outside of that range post-earnings will likely setup the next major trend for QCOR.
If you're in the bull camp on QCOR, then I would wait until after they report earnings and look for long-biased trades if this stock breaks out above its 50-day moving average of $45.57, and then some more overhead resistance at $46.88 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2,563,550 shares. If we get that action, then QCOR could spike back towards $54 a share or possibly higher post-earnings.
I would simply avoid QCOR or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then takes out its 200-day moving average of $40.81 a share with high volume. If we get that action, then QCOR could trend down towards $37 to $35 a share if the bears whack this lower post-earnings.