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Another potential earnings short-squeeze trade idea is worldwide information technology player Unisys (UIS), which is set to release its numbers on Tuesday after the market close. Wall Street analysts, on average, expect Unisys to report revenue $854.13 million on earnings of 40 cents per share.
The current short interest as a percentage of the float for Unisys is pretty high at 15.3%. That means that out of the 43.14 million shares in the tradable float, 6.57 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8.9%, or by about 539,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of UIS could easily spike sharply higher post-earnings as the bears rush to cover some of their bets.
From a technical perspective, UIS is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways and consolidating for the last two months, with shares moving between $24.11 on the downside and $27.08 on the upside. Shares of UIS are now starting to move within range of triggering a breakout trade above the upper-end of its recent sideways chart pattern post-earnings.
If you're in the bull camp on UIS, 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 $26.51 to $27.08 a share, and then once it clears its 52-week high at $28.25 a share high volume. Look for volume on that move that hits near or above its three-month average action of 427,802 shares. If that breakout hits, then UIS will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $32.50 to $35 a share.
I would simply avoid UIS or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day at $25.39 a share and then below more key near-term support levels at $24.66 to $24.11 a share with high volume. If we get that move, then UIS will set up to re-test or possibly take out its next major support levels at its 200-day moving average of $22.61 to $20 a share.
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