5 Earnings-Related Short-Squeeze Plays

If you're bullish on SONC, 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 levels at $10.64 to $10.83 a share and then once it takes out more overhead resistance at $10.94 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 516,313 shares. If that breakout triggers, then SONC will set up to enter new 52-week high territory, which is bullish technical price action.

I would avoid SONC or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support at $10.01 a share with volume. If we get that move, then SONC will set up to re-test or possibly take out its next major support levels at $9.62 to its 200-day moving average at $9.20 a share.

AngioDynamics

Another earnings short-squeeze play is AngioDynamics (ANGO), which is set to release numbers on Thursday after the market close. This company provides medical devices used in minimally invasive, image-guided procedures to treat peripheral vascular disease, and local oncology therapy options for treating cancer. Wall Street analysts, on average, expect AngioDynamics to report revenue of $87.39 million on earnings of 9 cents per share.

The current short interest as a percentage of the float for AngioDynamics is notable at 5%. That means that out of the 18.74 million shares in the tradable float, 1.25 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spike the stock dramatically post-earnings if a solid short-covering rally materializes.

From a technical perspective, ANGO is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending modestly for the last two months, with shares moving higher from a low of $10 to its recent high of $11.20 a share. During that uptrend, shares of ANGO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed ANGO within range of triggering a near-term breakout trade post-earnings.

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