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My final earnings short-squeeze trade idea today is energy player
Carrizo Oil & Gas(CRZO - Get Report), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Carrizo Oil & Gas to report revenue of $107.11 million on earnings of 34 cents per share.
During the last quarter, Carrizo Oil & Gas reported revenue of $105.9 million and GAAP reported sales were 86% higher than the prior-year quarter's $51.7 million. Non-GAAP EPS was 44 cents per share and gross margin was 89% or 570 basis points better than the prior-year quarter.
The current short interest as a percentage of the float for Carrizo Oil & Gas is pretty high at 14.8%. That means that out of the 36.64 million shares in the tradable float, 5.44 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of CRZO could easily see a solid short-squeeze post-earnings.
From a technical perspective, CRZO is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been trending sideways for the last four months, with shares moving between $19.47 on the downside and $23.04 on the upside. A high-volume move above the upper end of that sideways chart pattern could easily trigger a breakout trade for CRZO post-earnings.
If you're in the bull camp on CRZO, 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 at $23.04 a share and then once it clears its 200-day at $23.50 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 873,753 shares. If that breakout triggers, then CRZO will set up to re-test or possibly take out its next major overhead resistance levels at $26 to $27 a share.
I would simply avoid CRZO or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day of $21.43 a share and then once it takes out more support at $20.15 to $19.47 a share with high volume. If we get that move, then CRZO will set up to re-test or possibly take out its 52-week low at $19.04 a share, which is bearish technical price action.
To see more potential earnings short squeeze plays, check out the
Earnings Short Squeeze Plays portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.