From a technical perspective, BRLI is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last month and change, with shares falling from its high of $31.15 to its intraday low of $24.35 a share. During that downtrend, shares of BRLI have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of BRLI have now entered extremely oversold territory, since its current relative strength index reading is 34.57. Oversold can always get more oversold, but it's also an area where a stock can experience a powerful bounce higher from.
If you're in the bull camp on BRLI, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day at $26.92 a share and its 200-day at $28.27 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 309.600 shares. If that breakout triggers, then BRLI will set up to re-test or possibly take out its next major overhead resistance levels at $30 to $31.51 a share. Any high-volume move above those levels will then put $32 to $32.86 into range for shares of BRLI.
I would simply avoid BRLI or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support at $23.66 a share with high volume. If we get that move, then BRLI will set up to re-test or possibly take out its next major support levels at $22 to $20 a share.
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.
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