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5 Stocks Set to Soar on Bullish Earnings


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My first earnings short-squeeze trade idea today is global licensor of 3D technologies RealD ( RLD), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect RealD to report revenue of $42.97 million on a loss of 19 cents per share.

>>4 Stocks Spiking on Big Volume

The current short interest as a percentage of the float for RealD is pretty high at 11.3%. That means that out of the 41.41 million shares in the tradable float, 4.77 million shares are sold short by the bears. This stock sports a decent short interest with a relatively low tradable float. Any bullish earnings news could easily spark a monster short-squeeze for shares of RLD post-earnings.

From a technical perspective, RLD is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways inside of a consolidation pattern for the last month and change, with shares moving between $14.17 on the downside and $15.76 on the upside. A high-volume move above the upper end of its recent range could easily trigger a major breakout trade for RLD post-earnings.

If you're bullish on RLD, 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 $15.75 to its 52-week high at $15.76 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 356,281 shares. If that breakout triggers, then RLD will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $19 to $22 a share.

I would simply avoid RLD or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average at $14.49 a share and then below some key near-term support at $14.17 a share with high volume. If we get that move, then RLD will set up to re-test or possibly take out its next major support levels at $13 to $12 a share.
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