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 Set to Soar on Bullish Earnings

Adtran

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

Get Adobe Flash player

One potential earnings short-squeeze candidate is Adtran (ADTN), which is set to release numbers on Wednesday before the market open. This company designs, manufactures and markets solutions and provides services and support for communications networks. Wall Street analysts, on average, expect Adtran to report revenue of $139.79 million on 6 cent per share.

During the last quarter, this company beat Wall Street estimates after reporting in line results in the prior quarter. In the third quarter, Adtran reported a profit of 17 cents per share, compared with Wall Street estimates of 16 cents per share. Two quarters ago, it reported a net income of 35 cents per share. Heading into this earnings report, net income has dropped 48.2% on average for the last four quarters.

The current short interest as a percentage of the float for Adtran is very high at 18%. That means that out of the 62.34 million shares in the tradable float, 10.47 million shares are sold short by the bears. This is a large short interest on a stock with a reasonably small float. Any bullish earnings news could easily spark a solid short-covering rally post-earnings.

From a technical perspective, ADTN is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strongly for the last three months, with shares soaring from its low of $15.29 to its recent high of $21.22 a share. During that uptrend, shares of ADTN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed ADTN within range of triggering a breakout trade post-earnings.

If you're bullish on ADTN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key overhead resistance levels at $21.22 to $21.30 a share and then above $22 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.2 million shares. If that breakout triggers, then ADTN will set up to re-fill some of its previous gap down zone from last July that started at $27 a share.

I would avoid ADTN 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 $20 a share with high volume. If we get that move, then ADTN will set up to re-test or possibly take out its 50-day moving average of $19.09 a share. Any move below its 50-day will then put $18.77 to $18.36 a share into focus for shares of ADTN.

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 17,098.45 +18.88 0.11%
S&P 500 2,003.37 +6.63 0.33%
NASDAQ 4,580.2710 +22.5760 0.50%

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