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Another potential earnings short-squeeze play is Internet-based postage solutions provider
Stamps.com(STMP - Get Report), which is set to release its numbers on Wednesday after the market close. Wall Street analysts, on average, expect Stamps.com to report revenue of $31.37 million on earnings of 44 cents per share.
During the last quarter, this company reported revenue of $29.1 million and GAAP reported sales were 17% higher than the prior-year quarter's $24.9 million. Last quarter, non-GAAP EPS was 50 cents per share and GAAP EPS was 42 cents per share, which was 40% higher than the prior-year quarter's 30 cents per share.
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The current short interest as a percentage of the float for Stamps.com is notable at 5.1%. That means that out of the 14.18 million shares in the tradable float, 827,000 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 Stamps.com gives the bulls what they're looking for.
From a technical perspective, STMP is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways in a consolidation pattern for the last month, with shares moving between $25.73 on the downside and $28 on the upside. A high-volume move above the upper-end of that range post-earnings will trigger a breakout trade for shares of STMP.
If you're in the bull camp on STMP, 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 $28 to $28.49 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 153,352 shares. If that breakout triggers, then STMP will set up to re-test or possibly take out its next major overhead resistance levels at $32.49 to $33.29 a share.
I would simply avoid STMP 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 at $26.11 a share with high volume. If we get that move, then STMP will set up to re-test or possibly take out its 200-day moving average at $24.27 a share. Any high-volume move below that level could send STMP towards $23.50 a share or lower.