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Another earnings short-squeeze prospect is NQ Mobile (NQ), a global provider of mobile Internet services focusing on security, privacy and productivity, which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect NQ Mobile to report revenue of $32.98 million on earnings of 19 cents per share.
The current short interest as a percentage of the float for NQ Mobile is very high at 16.7%. That means that out of the 27.90 million shares in the tradable float, 4.50 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 15.1%, or by about 590,000 shares. If the short-sellers are caught pressing their bets into a bullish quarter, then we could easily see a monster short-squeeze develop for shares of NQ post-earnings.
From a technical perspective, NQ 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 month, with shares moving higher from its low of $7.80 to its intraday high of $9.70 a share. During that uptrend, shares of NQ have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of NQ within range of triggering a major breakout trade.
If you're bullish on NQ, 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 $10.20 to $10.68 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 788,400 shares. If that breakout triggers, then NQ will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $12 to $13 a share. Any move above $13 would then push shares of NQ into new all-time-high territory, which is bullish technical price action.
I would avoid NQ 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 its 50-day of $8.77 to $8.49 a share with high volume. If we get that move, then NQ will set up to re-test or possibly take out its next major support level a $7.80 to its 200-day moving average at $7.36 a share.
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