This Day On The Street
Continue to site
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

5 Stocks Set to Soar on Bullish Earnings


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

Get Adobe Flash player

My first earnings short-squeeze trade idea today is aerospace and defense player AeroVironment (AVAV - Get Report), which is set to report results on Wednesday after the market close. This company engages in the design, development, production, support and operation of unmanned aircraft systems and efficient energy systems for various industries and governmental agencies. Wall Street analysts, on average, expect AeroVironment to report revenue of $62.54 million on a loss of 3 cents per share.

AeroVironment has been hammered by the bears so far in 2012, with shares down by over 23%.

>>Top 5 Bargain Stocks in the S&P 500

The current short interest as a percentage of the float for AeroVironment stands at 6.1%. That means that out of the 19.01 million shares in the tradable float, 1.16 million shares are sold short by the bears. This is a decent short interest on a stock with a very low tradable float. If the bulls hear the news they're looking for, then AVAV could short-squeeze big post-earnings.

From a technical perspective, AVAV is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has dropped sharply from its June high of $27.82 to its recent low of $21.97 a share. During that slide, shares of AVAV made lower highs and lower lows, which is bearish technical price action. After that drop, shares of AVAV have started to trend sideways between $23 and $24.88 a share. A move outside of that sideways trading pattern post-earnings will likely setup the next major trend for AVAV.

If you're bullish on AVAV, then I would wait until after its report and look for long-biased trades if this stock can manage to break out above some near-term overhead resistance at $24.88 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 192,288 shares. If we get that action, then AVAV will have a great chance of re-testing or possibly taking out its next major overhead resistance levels at $26.48 to $27.82 a share post-earnings.

I would simply avoid AVAV or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops below some near-term support at $23.02 a share with heavy volume. If we get that move, then AVAV will setup to re-test and possibly take out its next major support areas at $21.97 to $21.14 a share. Keep in mind that any move below $21.14 should be considered bearish price action since it will push AVAV into new 52-week low territory.
2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr 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

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
AVAV $29.31 -1.40%
FRAN $16.78 -2.50%
GIII $46.14 0.04%
HITK $43.49 -0.02%
AAPL $94.85 -3.00%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,076.02 -19.13 -0.91%
NASDAQ 4,805.2910 -57.85 -1.19%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs