My final earnings short-squeeze play is solar energy player First Solar (FSLR), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect First Solar to report revenue of $721.08 million on earnings of 52 cents per share.
The current short interest as a percentage of the float for First Solar is extremely high at 16.2%. That means that out of the 63.28 million shares in the tradable float, 11.23 million shares are sold short by the bears. This is a high short interest on a stock with a relatively low float. If the bulls get the earnings news they're looking for, then shares of FSLR could soar higher post-earnings as the bears rush to cover some of their short bets.
From a technical perspective, FSLR 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, with shares moving between $45 on the downside and $51.60 on the upside. A high-volume move above the upper-end of its recent range could trigger a major breakout trade for shares of FSLR post-earnings.
If you're in the bull camp on FSLR, 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 $50 to $51.60 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 6.40 million shares. If that breakout triggers, then FSLR will set up to re-test or possibly take out its next major overhead resistance levels at $56.70 to its 52-week high at $59 a share. Any high-volume move above $59 will then put $65 to $70 into range for shares of FSLR.
I would avoid FSLR 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 $46.30 to $45 a share with high volume. If we get that move, then FSLR will set up to re-test or possibly take out its next major support levels at $40.46 to its 200-day moving average at $36.01 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.
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