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Another potential earnings short-squeeze play is communications networking equipment maker
CIEN), which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Ciena to report revenue of $483.34 million on a loss of 1 cent per share.
The current short interest as a percentage of the float for Ciena is very high at 18.3%. That means that out of the 86.44 million shares in the tradable float, 18.09 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of CIEN could easily explode higher post-earnings.
From a technical perspective, CIEN is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last month, with shares moving higher from its low of $14.22 to its recent high of $17.11 a share. During that uptrend, shares of CIEN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CIEN within range of triggering a near-term breakout trade post-earnings.
If you're in the bull camp on CIEN, 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 $17.11 to $17.78 a share and then once it takes out some past resistance at $18.39 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 3.59 million shares. If that breakout hits, the CIEN will set up to re-test or possibly take out its next major overhead resistance levels at $22 to $24 a share.
I would simply avoid CIEN 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 $16.50 to $16 a share with high volume. If we get that move, then CIEN will set up to re-test or possibly take out its next major support levels at its 50-day of $15.52 to its 200-day at $15.12 a share. Any high-volume move below its 200-day will then put $14.50 to $14 into range for shares of CIEN.