SODA data by YCharts
My first earnings short-squeeze play is soda machine maker
(SODA - Get Report)
, which is set to release numbers on Wednesday before the market open. This company, along with its subsidiaries, is engaged in developing, manufacturing and marketing home beverage carbonation systems and related products. Wall Street analysts, on average, expect SodaStream International to report revenues of $90.64 million on earnings of 48 cents per share.
If you're looking for a strong uptrending heavily shorted stock heading into its earnings report this week, then make sure to check out shares of SodaStream International. This stock has been on fire during the last three months, with shares up a whopping 39%. The current short interest as a percentage of the float for SodaStream International is extremely high at 55.2%. That means that out of the 16.99 million shares in the tradable float, 9.85 million shares are sold short by the bears.
From a technical perspective, SODA is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock formed a double-bottom chart pattern back in May at around $29.82 to $29.44 a share. After hitting that bottom, shares of SODA have soared to its recent high of $43.70 a share. During that uptrend, shares of SODA have mostly made higher lows and higher highs, which is bullish technical price action. That move has now pushed SODA within range of triggering a near-term breakout trade.
If you're bullish on SODA, then I would wait until after they report earnings and look for long-biased trades, if this stock can manage to take out some overhead resistance at $44 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1,041,170 shares. If we get that move, then SODA will have a great chance to re-test and possibly take out its next major overhead resistance level at $48.13 a share.
I would simply avoid SODA or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops below some near-term support at $40 a share with high volume. If we get that move, then look for SODA to re-test and possibly take out either its 50-day at $37.53 or its 200-day at $35.77 a share.