One potential earnings short-squeeze trade in the oil well services and equipment complex is Flotek Industries (FTK - Get Report), which is set to release numbers on Wednesday after the market close. This is a diversified global supplier of drilling and production-related products and services. Wall Street analysts, on average, expect Flotek Industries to report revenues of $77.83 million on earnings of 20 cents per share.
This company has beaten Wall Street estimates for the last three quarters in a row. During the first quarter, revenue jumped 49.7% to $79.2 million versus $52.9 million for the same quarter last year. Flotek Industries has averaged year-over-year revenue growth of 68.7% over the last four quarters.
The current short interest as a percentage of the float for Flotek Industries is very high at 17.4%. That means that out of the 40.13 million shares in the tradable float, 8.06 million shares are sold short by the bears. This is a low float stock with a very high short interest. If the bulls get the news they're look for, then FTK could easily see a sharp short-covering rally post-earnings.From a technical perspective, FTK is currently trading above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock was smoked by the bears off its May high of $14.73 to its recent low of $8.46 a share. During that sharp move lower, shares of FTK have consistently made lower high and lower lows, which is bearish technical price action. That said, the stock has started to rebound off $8.46 to its current price near $10.30 a share. That move has pushed FTK within range of triggering a near-term breakout trade post-earnings. If you're in the bull camp on FTK, then I would wait until after they report and look for long-biased trades if the stock manages to trigger a breakout trade above some near-term overhead resistance levels at $10.52 to $10.65 a share with high volume. Look for volume on that move that clocks in close to or above its three-month average action of 995,241 shares. If we get that move, then look for FTK to re-test and possibly take out its next major overhead resistance levels at $11.24 to $11.48 a share post-earnings. I would simply avoid FTK or look for short-biased trades if after earnings the stock fails to trigger that breakout, and then moves back below its 50-day moving average of $9.79 a share with high volume. If we get that move, then look for FTK to possibly re-test or take out its June low of $8.46 a share post-earnings.