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Another potential earnings short-squeeze trade is
Actuant(ATU - Get Report), a global manufacturer and marketer of a range of industrial products and systems. which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Actuant to report revenue of $409.98 million on earnings of 54 cents per share.
This company has beaten Wall Street estimates for the last four quarters in a row, and it's coming off a quarter in which it topped estimates by 1 cent, after reporting a net income of 60 cents per share vs. estimates of 59 cents per share.
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The current short interest as a percentage of the float for Actuant is pretty high at 9%. That means that out of the 67.37 million shares in the tradable float, 6.03 million shares are sold short by the bears. Any bullish earnings news could easily spark a solid short-covering rally post-earnings.
From a technical perspective, ATU 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 four months, with shares soaring from a low of $24.23 to a recent high of $31.33 a share. During that uptrend, shares of ATU have consistently made higher lows and higher highs, which is bullish technical price action. That move has now pushed ATU within range of triggering a near-term breakout trade.
If you're in the bull camp on ATU, 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 $31.33 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 552,403 shares. If ATU triggers that breakout, then this stock could tag $35 a share or higher post-earnings.
I would simply avoid ATU or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then drops back below its 50-day moving average at $28.53 a share with high volume. If we get that move, then ATU will setup to re-test or possibly take out its 200-day moving average of $26.85 a share post-earnings.