This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Stocks Poised to Pop on Bullish Earnings

Stocks in this article: PVHTFMCYBXBWSCONN

Cyberonics

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Another possible earnings short-squeeze play is medical equipment and supplies player Cyberonics (CYBX), which is set to release numbers on Tuesday before the market open. This company offers vagus nerve stimulation therapy, a neuromodulation therapy for the treatment of refractory epilepsy and treatment-resistant depression, and other device solutions for the management of epilepsy. Wall Street analysts, on average, expect Cyberonics to report revenue of $58.45 million on earnings of 36 cents per share.

This company has topped Wall Street estimates during the last four quarters. Over that timeframe, the average earnings surprise was a positive 15.73%. William Blair recently initiated coverage on Cyberonics with an outperform rating. This stock has been off to strong start in 2012, with shares up over 30% so far.

The current short interest as a percentage of the float for Cyberonics stands at 8.4%. That means that out of the 24.01 million shares in the tradable float, 2.22 million shares are sold short by the bears. This is a decent short interest on a stock with an extremely low float. Any bullish news out of Cyberonics that the bulls like could easily spark a large short-squeeze post-earnings.

From a technical perspective, CYBX is currently trading above its 200-day moving average and right below its 50-day moving average, which is neutral trendwise. During the last four months, shares of Cyberonics have been uptrending strong with shares trending higher from $36.25 to its recent high of $47.39 a share. During that uptrend, shares of CYBX have consistently made higher lows and higher highs, which is bullish technical price action. That move has pushed CYBX within range of triggering a near-term breakout trade.

If you're in the bull camp on CYBX, then I would look for long-biased trades after earnings if this stock manages to trigger breakout trade above some near-term overhead resistance levels at $45.58 to $46.05 a share, and then above its 52-week high of $47.39 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 245,684 shares. If we get that move, then look for CYBX to trade north of $50 a share post-earnings.

I would simply avoid CYBX or look for short-biased trades after earnings the stock fails to trigger that breakout, and then moves back below some near-term support at $43.57 to $42.25 a share with high volume. If we get that action, then look for CYBX to re-test and possibly take out its next significant support levels at $40 to $41 a share, or possibly even its 200-day moving average of $37.80 a share.

5 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs