5 Earnings Short-Squeeze Plays

I would avoid IOC or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops below some key near-term support levels at $63.15 to $63 a share with high volume. If we get that action, then look for IOC to re-test or possibly take out its next major support level at $57.58 a share. Any high-volume move below $57.58 will then put $52.89 into focus for IOC.

Cornerstone OnDemand

Another earnings short-squeeze candidate is Cornerstone OnDemand (CSOD), which is set to release numbers on Monday after the market close. This company is a global provider of a learning and talent management solution delivered as software-as-a-service (SaaS). Wall Street analysts, on average, expect Cornerstone OnDemand to report revenue of $30.22 million on a loss of 6 cents per share.

The current short interest as a percentage of the float for Cornerstone OnDemand is worth noting at 6.1%. That means that out of the 34.65 million shares in the tradable float, 2.05 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a decent short-squeeze if Cornerstone OnDemand can give the bulls what they're looking for.

From a technical perspective, CSOD is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been uptrending strongly for the last six months, with shares soaring from a low of $18.02 to its recent high of $32.50 a share. During that uptrend, shares of CSOD have been consistently making higher lows and higher highs, which is bullish technical price action. Over the last month, shares of CsoD have sold off a bit from that high of $32.50 to $27.30 a share, but the stock is still trending within range of triggering a near-term breakout trade post-earnings.

If you're bullish on CSOD, 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 levels at $29.55 to $29.58 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 342,041 shares. If we get that breakout, then look for CSOD to re-test or possibly take out its next major overhead resistance level at $32.50 a share. Any high-volume move above $32.50 a share should be considered bullish technical action, since shares of CSOD will then enter new 52-week high territory.

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