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My final earnings short-squeeze trade idea today is
OpenTable(OPEN), which is set to release numbers on Thursday after the market close. This company provides solution that forms an online network connecting reservation-taking restaurants and people who dine at those restaurants. Wall Street analysts, on average, expect OpenTable to report revenue of $39.69 million on earnings of 36 cents per share.
This stock has been uptrending pretty strong for the last three months, with shares up sharply by 30%. That move has pushed shares of OpenTable within six points of its 52-week high of $52.64 a share ahead of its earnings report.
The current short interest as a percentage of the float for OpenTable is extremely high at 42.1%. That means that out of the 17.7 million shares in the tradable float, 9.22 million shares are sold short by the bears. This is a large short interest on a stock with a very low tradable float. If the bulls get the news they're looking for from OPEN, then we could easily see the stock skyrocket higher post-earnings.
From a technical perspective, OPEN 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 soaring from a low of $39.94 to its recent high of $47.23 a share. During that uptrend, shares of OPEN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed OPEN within range of triggering a near-term breakout trade post-earnings.
If you're in the bull camp on OPEN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance at $47.23 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 728,020 shares. If we get that move, then OPEN will set up to re-test or possibly take out its next major overhead resistance levels at $50.29 to $53 a share post-earnings.
I would simply avoid OPEN or look for short-biased trades if after earnings it fails to trigger that breakout, and then moves back below its 50-day at $44.78 a share with high volume. If we get that move, then OPEN will set up to re-test or possibly take out its 200-day at $42.79 a share. Any high-volume move below its 200-day will then put $39.94 into focus for OPEN.
To see more potential earnings short squeeze plays, check out the
Earnings Short Squeeze Plays portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.