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My final earnings short-squeeze trade idea is provider of cloud marketing software
VOCS), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Vocus to report revenue of $45.26 million on a loss of 2 cents per share.
The current short interest as a percentage of the float for Vocus is notable at 4.9%. That means that out of the 13.85 million shares in the tradable float, 957,000 shares are sold short by the bears. . The bears have also been increasing their bets from the last reporting period by 35.9%, or by about 253,000 shares. If the bears are caught pressing their bets into a bullish quarter, then shares of VOCS could easily spike sharply higher post-earnings.
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From a technical perspective, VOCS is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock gapped down sharply back in April from $13.60 to $8.05 a share. Since that move this stock has been uptrending strong for the last three months, with shares moving higher from its low of $8.05 to its recent high of $11.62 a share. During that uptrend, shares of VOCS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of VOCS within range of triggering a major breakout trade.
If you're in the bull camp on VOCS, 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 $11.62 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 686,665 shares. If that breakout triggers, then VOCS will set up to re-fill some of its previous gap down zone from April that started at $13.60 a share. This stock could even trend north of $14 a share if that gap gets filled with strong volume flows.
I would avoid VOCS 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 $10.69 a share to its 50-day at $9.83 a share with high volume. If we get that move, then VOCS will set up to re-test or possibly take out its next major support levels at $9 to $8.50 a share. Any high-volume move below those levels will then put its 52-week low at $8.05 into range for share of VOCS.
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.