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
One potential earnings short-squeeze candidate is semiconductor player
Skyworks Solutions (
SWKS), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Skyworks Solutions to report revenue of $4.35.41 million on earnings of 53 cents per share.
Just recently, Sterne Agee recommended Skyworks as a buy at current levels, noting that it expects smart phone unit builds to rise 15% in the second half of 2013 vs. the first half of 2013.
>>3 Tech Stocks in Breakout Territory
The current short interest as a percentage of the float for Skyworks Solutions stands at 5.9%. That means that out of the 189.87 million shares in the tradable float, 11.13 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 18.8%, or by about 1.75 million shares. If the bears are caught pressing their bets into a bullish quarter, then shares of SWKS could easily explode higher post-earnings if a short-squeeze develops.
From a technical perspective, SWKS is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways for the last month and change, with shares moving between $20.61 on the downside and $22.77 on the upside. A high-volume move above the upper-end of its recent range could trigger a breakout trade for shares of SWKS post-earnings.
If you're bullish on SWKS, 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 at $22.77 to $23 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 3.23 million shares. If we get that breakout, then SWKS will set up to re-test or possibly take out its next major overhead resistance levels at $24.58 to $25.10 a share. Any high-volume move above those levels will then put its next major overhead resistance levels at $29 to $30 into range for shares of SWKS.
I would avoid SWKS or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 200-day at $21.99 a share with high volume. If we get that move, then SWKS will set up to re-test or possibly take out its next major support levels at $20.95 to $20.61 a share. Any high-volume move below those levels will then put its next major support levels at $19.57 to $19.21 into range for shares of SWKS.