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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Poised to Pop on Bullish Earnings

K12

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

Get Adobe Flash player

Another potential earnings short-squeeze trade is technology-based education player K12 (LRN), which is set to release numbers on Thursday before the market open. This company offers curriculum and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade. Wall Street analysts, on average, expect K12 to report revenue of $165.39 million on a loss of 3 cents per share.

This stock has been off to a hot start so far in 2012, with shares up over 30%. Despite that hot start, shares of K12 are trending well off its 52-week high of $37 a share as we move close to its earnings report.

>>10 Companies That Prove Stock Picking Is Still Alive

The current short interest as a percentage of the float for K12 is extremely high at 41.1%. That means that out of the 26.14 million shares in the tradable float, 10.42 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 1.1%, or by about 113,000 shares.

From a technical perspective, LRN is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last month, with shares skyrocketing from a low of $17.19 to its recent high of $23.94 a share. During that sharp move higher, shares of LRN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now moved LRN within range of triggering a major breakout trade post-earnings.

If you're bullish on LRN, then I would wait until after its report and look for long-biased trades if this stock can manage to take out some overhead resistance levels to $23.94 to $25.39 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 250,186 shares. If we get that breakout, then look for LRN to re-test and possibly take out its next major overhead resistance levels at $26.40 to $28.83 a share.

I would avoid LRN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops below its 200-day at $22 and its 50-day at $21.10 a share with heavy volume. If we get that action, then LRN will setup to re-test and possibly take out its next major support level at $20.28 a share.

4 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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 16,982.59 +22.02 0.13%
S&P 500 1,978.91 +0.57 0.03%
NASDAQ 4,444.9090 -4.6550 -0.10%

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