One possible earnings short-squeeze trade in the biotechnology and drugs complex is Infinity Pharmaceuticals (INFI), which is set to release numbers on Tuesday after the market close. This company engages in the discovery and development of medicines for difficult-to-treat diseases. Wall Street analysts, on average, expect Infinity Pharmaceuticals to report revenue of $27.53 million on a loss of 38 cents per share.
If you're looking for a strong, uptrending, heavily shorted biotech stock ahead of its earnings report, then make sure to check out shares of Infinity Pharmaceuticals. This stock has been on an absolute tear this year with shares up over 80%, and its currently trading just a few points off its 52-week high of $18.37 a share.The current short interest as a percentage of the float for Infinity Pharmaceuticals is very high at 23.6%. That means that out of the 16.35 million shares in the tradable float, 2.81 million shares are sold short by the bears. The short-sellers have also been increasing their bets from the last reporting period by 7.1%, or by about 185,000 shares. From a technical perspective, INFI is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been in a monster uptrend for the past six months, with shares soaring from a low of $5.96 to a recent high of $18.37 a share. During that uptrend, shares of INFI have consistently made higher lows and higher highs, which is bullish technical price action. That move has now pushed the stock within range of triggering a near-term breakout trade post-earnings. If you're in the bull camp on INFI, then I would look for long-biased trades after earnings if this stock manages to trigger a near-term break out above its 52-week high of $18.37 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 252,941 shares. If we get that move, then look for INFI to trade north of $20 a share post-earnings. I would simply avoid INFI or look for short-biased trades if after earnings the stock fails to trigger that breakout, and then moves back below some near-term support levels at $16.16 to $14.93 a share, and then below its 50-day moving average of $14.41 a share with heavy volume. If we get that move, then look for INFI to possibly trade down toward $13 to $12 a share post-earnings.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
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.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
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.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV