My final earnings short-squeeze trade idea today is health care facilities player
(AMED - Get Report)
, which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Amedisys to report revenue of $373.13 million on earnings of 22 cents per share.
If you're looking for a heavily shorted stock that's been beaten down a bit heading into its earnings report this week, then check out shares of Amedisys. This stock has dropped 22% during the last six months, and shares are only trading about three points off its 52-week low of $9.51 a share.
The current short interest as a percentage of the float for Amedisys is rather high at 12.2%. That means that out of the 30.05 million shares in the tradable float, 3.66 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 1.3%, or by about 47,000 shares. If the bears are caught pressing their short bets into a bullish quarter, then we could easily see shares of AMED spike sharply higher post-earnings.
From a technical perspective, AMED is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has recently started to trend back above its 50-day moving average at $11.60 a share and is now quickly moving within range of triggering a near-term breakout trade.
If you're in the bull camp on AMED, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average of $12.22 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 304,587 shares. If that breakout triggers, then AMED will set up to re-test or possibly take out its next major overhead resistance levels at $13.36 to $13.63 a share. Any move above those levels will then put $14 to $15 into range for shares of AMED.
I would simply avoid AMED 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 levels at $10.75 to $10.72 a share with high volume. If we get that move, then AMED will set up to re-test or possibly take its next major support levels at $10.26 to $9.52 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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