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My final earnings short-squeeze play today is semiconductor stock
MIPS Technologies(MIPS), which is set to release numbers on Wednesday after the market close. This company is a provider of industry-standard processor architectures and cores for digital home, networking and mobile applications. Wall Street analysts, on average, expect MIPS Technologies to report revenues of $14 million on a loss of 6 cents per share.
If you're looking for a strong uptrending stock with a decent short interest heading into its earnings report this week, then make sure to check out shares of MIPS Technologies. This stock has skyrocketed so far in 2012, with shares up over 45%. This stock is currently trading just one point off its 52-week high of $7.38 a share.
The current short interest as a percentage of the float for MIPS Technologies stands at 6.6%. That means that out of the 48.17 million shares in the tradable float, 3.52 million are sold short by the bears. This is a decent short interest on a stock with a relatively low float. Any bullish earnings news from MIPS could easily send this stock soaring post-earnings.
technical perspective, MIPS is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending range bound for the last four months, with shares moving between $5.82 and $7.38 a share. A move outside of that range post-earnings will likely setup the next major trend for MIPS.
If you're bullish on MIPS, then I would wait until after they report earnings and look for long-biased trades if it can manage to trigger a breakout trade above some near-term overhead resistance at $6.95 to $7.14 a share, and then above $7.38 a share with high volume. If we get that action, then MIPS has a great chance of re-testing and possibly taking out its next major overhead resistance level at $8.27 a share.
I would simply avoid MIPS after earnings if it fails to trigger that breakout, and then moves back below its 50-day moving average of $6.43 with heavy volume. If we get that move, then look for MIPS to re-test and possibly take out its 200-day moving average of $5.79 a share post-earnings.
To see more potential earnings short squeeze plays, check out the
Earnings Short Squeeze Plays portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.