This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

5 Hated Earnings Stocks You Should Love

Stocks in this article: AYISTZGBXISCASHLM

A. Schulman

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

My final earnings short-squeeze trade idea tpday is suppler of plastic compounds, resins and services A. Schulman ( SHLM), which is set to release numbers on Monday after the market close. Wall Street analysts, on average, expect A. Schulman to report revenue of $576.10 million on earnings of 65 cents per share.

This company has beaten Wall Street estimates three times in the last four quarters, so another solid beat this quarter could easily get this stock juiced to the upside post-earnings.

>>5 Stocks With Big Insider Buying

The current short interest as a percentage of the float for A. Schulman sits at 2.4%. That means that out of the 28.70 million shares in the tradable float, 699,000 shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.8%, or by about 661,000 shares. If the bears are caught pressing their bets into a bullish quarter, then shares of SHLM could spike notably higher post-earnings as the shorts rush to cover some of their bets.

From a technical perspective, SHLM is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been downtrending for the last month and change, with shares moving lower from its high of $29.95 to its recent low of $25.53 a share. During that move, shares of SHLM have been mostly making lower highs and lower lows, which is bearish technical price action. That said, shares of SHLM have just started to bounce off that $25.53 low and are now quickly moving within range of triggering a near-term breakout trade.

If you're in the bull camp on SHLM, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day at $27.76 a share and then above more overhead resistance at $29.95 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 190,788 shares. If we get that breakout, then SCHN will set up to re-test or possibly take out its next major overhead resistance levels at $32.50 to $33.14 a share. Any high-volume move above that level will then put $35 to $40 into range for shares of SHLM.

I would avoid SHLM 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 $27.54 a share with high volume. If we get that move, then SHLM will set up to re-test or possibly take out its next major support levels at $25.53 to $24.61 a share, or even $23 a share. Any high-volume move below $23 could then send SHLM towards $20 a share.

To see more potential earnings short squeeze plays, check out the Earnings Short-Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

6 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,399.67 +19.26 0.12%
S&P 500 1,904.01 +17.25 0.91%
NASDAQ 4,316.0740 +57.6360 1.35%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs