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TheStreet Open House

5 Hated Earnings Stocks That Deserve Your Love

Stocks in this article: CSTREXPEFIOMLNXANGI

I would simply avoid ANGI 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 $19.67 a share to its 50-day at $18.55 a share with high volume. If we get that move, then ANGI will set up to re-test or possibly take out its next major support levels $18.15 to $16 a share. Any high-volume move below $16 will then give ANGI a chance to re-fill its previous gap up zone from February that started just below $14 a share.

Coinstar

Another potential earnings short-squeeze candidate is automated retail solutions provider Coinstar ( CSTR), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Coinstar to report revenue of $579.41 million on earnings of 86 cents per share.

>>3 Huge Stocks to Trade (or Not)

The current short interest as a percentage of the float for Coinstar is extremely high at 48.1%. That means that out of the 25.90 million shares in the tradable float, 13.21 million shares are sold short by the bears. This is a monster short interest on a stock with a relatively low tradable float. Any bullish earnings news from Coinstar could easily set off a large short-squeeze for the stock post-earnings.

From a technical perspective, CSTR is currently trending below its 50-day moving average and just above its 200-day moving average, which is neutral trendwise. This stock recently formed a double top at around $59.16 to $59.31 a share. Following that top, shares of CSTR have dived lower and trended back below its 50-day moving average of $54.89 a share.

If you're bullish on CSTR, then I would wait until after its report and look for long-biased trades if this stock manages to break out back above its 50-day at $54.89 a share with strong volume. Look for volume on that move that hits near or above its three-month average volume of 963,660 million shares. If we get that breakout, then CSTR will set up to re-test or possibly take out its next major overhead resistance levels at $58 to $59.31 a share. Any high-volume move above $59.31 will then put $62.50 to $65 into range for shares of CSTR.

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