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Another potential earnings short-squeeze candidate is developer, manufacturer and marketer of home beverage carbonation systems
Sodastream International (
SODA), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Sodastream International to report revenue of $113.11 million on earnings of 54 cents per share.
Just this morning, Roth Capital said it expects Sodastream International to benefit from rapidly expanding sales and new brand partnership but warned that the company's operating margin is likely to fall 100 basis points in the first quarter due to production issues and its Super Bowl ad. The firm is keeping its $60 price target on the stock and its buy rating.
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The current short interest as a percentage of the float for Sodastream International is extremely high at 39.5%. That means that out of the 17.36 million shares in the tradable float, 7.23 million shares are sold short by the bears. This is high short interest on a stock with a very small float. If the bulls get the earnings news they're looking for, then this stock could easily skyrocket higher post-earnings.
From a technical perspective, SODA 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 two months, with shares moving higher from its low of $45.25 to its intraday high of $56 a share. During that uptrend, shares of SODA have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SODA within range of triggering a major breakout trade.
If you're bullish on SODA, then I would wait until after its report and look for long-biased trades if this stock manages to break out to a new 52-week high above $56 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 810,468 shares. If we get that breakout, then SODA will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $65 to $70 a share.
I would avoid SODA 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 $53 to $52 a share with high volume. If we get that move, then SODA will set up to re-test or possibly take out its 50-day at $50.33 a share. Any high-volume move below its 50-day could then put $47 to $45 into range for shares of SODA.