Another earnings short-squeeze prospect is mortgage insurance and financial guaranty player Radian Group ( RDN), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Radian Group to report revenue of $200.72 million on a loss of 2 cents per share.
The current short interest as a percentage of the float for Radian Group is extremely high at 26.8%. That means that out of the 125.20 million shares in the tradable float, 45.96 shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 6.1%, or by about 2.62 million shares. If the bears are caught pressing their bets too aggressively into a strong quarter, then shares of RDN could skyrocket higher post-earnings.From a technical perspective, RDN is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last few weeks, with shares moving higher from its low or $9.84 to its recent high of $12.24 a share. During that uptrend, shares of RDN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RDN within range of triggering a major breakout trade post-earnings. If you're bullish on RDN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $12.24 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 10.59 million shares. If that breakout triggers, then RDN will set up to enter new 52-week high territory above, which is bullish technical price action. Some possible upside targets off that breakout are $15 to $17 a share. I would avoid RDN 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 $11 a share with high volume. If we get that move, then RDN will set up to re-test or possibly take out its next major support level at its 50-day moving average of $10.09 a share to $9.84 to $9.62 a share.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts