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Another earnings short-squeeze play is semiconductor player
Cirrus Logic(CRUS - Get Report), which is set to release its numbers on Monday after the market close. This company develops analog and mixed-signal integrated circuits for a range of audio and energy markets. Wall Street analysts, on average, expect Cirrus Logic to report revenue of $100.94 million on earnings of 21 cents per share.
This company has met or beat Wall Street's bottom-line earnings estimates in three of the last four quarters. Just this morning, Canaccord Genuity issued a new buy rating on the stock with a $35 a share price target. The firm said Cirrus Logic is leveraged to new product release at
The current short interest as a percentage of the float for Cirrus Logic is rather high at 13.9%. That means that out of the 64.06 million shares in the tradable float, 8.86 million shares are sold short by the bears. The short-sellers have also been increasing their bets from the last reporting period by 8.4%, or by about 688,000 shares. If the bears are caught leaning too hard into a solid quarter for Cirrus Logic, then we could easily see a monster short-squeeze setup post-earnings.
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From a technical perspective CRUS is currently trading above both its
50-day and 200-day moving averages, which is bullish. This stock has been uptrending pretty strong for the last three months, with shares making mostly higher lows and higher highs, which is bullish price action. Shares of CRUS have recently traded back above its 50-day moving average of $27.92 a share, and its quickly moving within range of triggering a
major breakout trade.
If you're in the bull camp on CRUS, then I would wait until after they report and look for long-biased trades if this stock triggers a break out above some near-term
overhead resistance levels at $30.22 to $31.23 a share with heavy volume. Look for volume on that move that clocks in close to or above its three-month average action of 2,525,680 shares. If we get that move, then CRUS will have a great chance of trading north of $35 a share.
I would simply avoid CRUS or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then moves back below its 50-day moving average of $27.92 a share with high volume. If we get that action, then CRUS will likely re-test and possibly take out its next significant support levels at $24.94 to $24.44 a share post-earnings.