My first earnings short-squeeze play today is IT-enabled operations and services player Igate (IGTE - Get Report), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Igate to report revenue of $272.14 million on earnings of 39 cents per share.
The current short interest as a percentage of the float for Igate stands at 3.5%. That means that out of the 25.08 million shares in the tradable float, 1.11 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a solid short-covering rally if the bulls get the earnings news they're looking for.
From a technical perspective, IGTE 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 trading sideways for the last month, with shares moving between $15.50 on the downside and $16.73 on the upside. A move above the upper-end of that range post-earnings will trigger a near-term breakout trade for shares of IGTE.If you're bullish on IGTE, 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 $16.70 to $16.73 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 166,284 shares. If that breakout hits, then IGTE will set up to re-test or possibly take out its next major overhead resistance levels at $18 to $19.50 a share. I would simply avoid IGTE or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some near-term support levels at $15.73 to $15.66 a share with heavy volume. If we get that move, then IGTE will set up to re-test or possibly take out its next major support levels at $15 to $14.67 a share. Any move below $14.67 would then push IGTE into new 52-week-low territory, which is bearish technical price action.