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Another earnings short-squeeze prospect is motion picture technologies player
Imax(IMAX - Get Report), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Imax to report revenue of $73.98 million on earnings of 16 cents per share.
If you're looking for a heavily shorted stock that's been uptrending strong heading into its earnings report this week, then make sure to take a hard look at shares of Imax. This stock is up 17.3% during the last three month, and it's currently trading about one point off its 52-week high of $26.68 a share.
The current short interest as a percentage of the float for Imax is very high at 25.8%. That means that out of the 55.64 million shares in the tradable float, 14.42 million shares are sold short by the bears. This is an aggressive short interest for a stock with a relatively low tradable float. Any bullish earnings news could easily spark a monster short-squeeze for shares of IMAX post-earnings.
From a technical perspective, IMAX is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months and change, with shares moving higher from its low of $20.49 to its recent high of $26.18 a share. During that uptrend, shares of IMAX have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of IMAX within range of triggering a major breakout trade post-earnings.
If you're bullish on IMAX, 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 $26.18 to $26.68 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 800,574 shares. If that breakout triggers, then IMAX will set up to enter new 52-week-high territory above $26.68 a share, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $33 a share, or even $38 a share.
I would avoid IMAX 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 $25 to $24 a share with high volume. If we get that move, then IMAX will set up to re-test or possibly take out its next major support level at its 50-day moving average of $23.31 a share. Any high-volume move below its 50-day will then put its 200-day at $22.19 into range for shares of IMAX.