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Another earnings short-squeeze play is cardiac support systems developer
AbioMed(ABMD - Get Report), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect AbioMed to report revenue of $38.04 million on earnings of 7 cents per share.
The current short interest as a percentage of the float for AbioMed is extremely high at 21.1%. That means that out of the 34.72 million shares in the tradable float, 7.61 million shares are sold short by the bears. This is a low float high short interest situation, so any bullish earnings news could easily send shares of ABMD soaring higher as the bears rush to cover some of their bearish bets.
From a technical perspective, ABMD is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock has been trending sideways during the last three months, with shares moving between $14.94 on the upside and $11.80 on the downside. Shares of ABMD have recently pushed back above its 50-day moving average of $13.30 a share and its now quickly moving within range of breaking out above the upper-end of its recent sideways chart pattern.
If you're bullish on ABMD, 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 $14.13 to $14.94 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 941,987 shares. If that breakout triggers, then AMBD will set up to re-test or possibly take out its next major overhead resistance level at around $16 a share. Any high-volume move above $16 will then give ABMD a chance to re-fill some of its previous gap down zone from last November that started at $20 a share.
I would avoid ABMD or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day moving average of $13.30 a share and then below some more support at $13 a share with high volume. If we get that move, then ABMD will set up to re-test or possibly take out its next major support levels at $11.96 to $11.80 a share. Any move below $11.80 a share should be considered very bearish, since it will push shares of ABMD into new 52-week low territory.