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My first earnings short-squeeze play is diversified machinery player
Pall(PLL), which is set to report results on Wednesday after the market close. This company manufactures and markets filtration, purification and separation products and integrated systems solutions worldwide. Wall Street analysts, on average, expect Pall to report revenue of $718.79 million on earnings of 77 cents per share.
Pall has posted a profit for the last eight quarters, and for the last four, profit has trended higher year over year by an average 24.4%. During the fourth quarter of last year, Pall posted its largest jump profit of 77.2%.
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The current short interest as a percentage of the float for Pall stands at 6.3%. That means that out of the 116.20 million shares in the tradable float, 7.3 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4.9%, or by about 342,000 shares.
technical perspective, PLL is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong off its July low of $49.77 to its recent high of $57.93 a share. During that uptrend, shares of PLL have consistently been making higher lows and higher highs, which is bullish price action. That move has now pushed PLL within range of triggering a breakout trade post-earnings.
If you're bullish on PLL, then I would wait until after its report and look for long-biased trades if this stock can manage to break out above some overhead resistance levels at $57.93 to $58.72 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 776,867 shares. If that
breakout triggers, then look for PLL to re-test and possibly take out its next
major overhead resistance level at $60.38 a share. If that $60.38 level gets taken out, then PLL could tag $64 a share or higher post-earnings.
I would simply avoid PLL or look for short-biased trades if after earnings it fails to trigger that breakout and then drops below its 200-day moving average of $56.75 a share with heavy volume. If we get that move, then PLL will setup to re-test or possibly take out its 50-day moving average of $54.03 a share. If that 50-day gets taken out, then PLL could drop back towards $52 to $50 a share post-earnings.