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My final earnings short-squeeze trade idea is broadband services provider
Towerstream(TWER - Get Report) which is set to release numbers on Monday after the market close. Wall Street analysts, on average, expect Towerstream to report revenue of $8.18 million on a loss of 11 cents per share.
If you're looking for a stock with a decent short interest that's been beaten down heading into its earnings report this week, then make sure to check out shares of Towerstream. This stock has dropped sharply over the last six months, with shares off by 29%.
The current short interest as a percentage of the float for Towerstream is rather high at 12.1%. That means that out of the 50.61 million shares in the tradable float, 7.24 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of TWER could easily see a sharp short-squeeze post-earnings.
From a technical perspective, TWER is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last three months, with shares dropping from its high of $3.92 to its recent low of $2.42 a share. During that downtrend, shares of TWER have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of TWER have recently started to rebound off that $2.42 low and quickly move within range of triggering a near-term breakout trade post-earnings.
If you're in the bull camp on TWER, 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 $3.05 to $3.07 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 475,108 shares. If that breakout triggers, then TWER will set up to re-test or possibly take out its next major overhead resistance levels at $3.46 to its 200-day moving average at $3.53 a share. Any high-volume move above $3.53 will then put $3.92 to $3.98 into range for shares of TWER.
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.