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Another earnings short-squeeze prospect is independent oil and natural gas player
Goodrich Petroleum (
GDP), which is set to release numbers on Monday after the market close. Wall Street analysts, on average, expect Goodrich Petroleum to report revenue of $58.67 million on a loss of 69 cents per share.
The current short interest as a percentage of the float for Goodrich Petroleum is extremely high at 27.9%. That means that out of the 27.91 million shares in the tradable float, 7.66 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 28.7%, or by about 1.70 million shares. If the bears get caught pressing their bets into a strong quarter, then shares of GDP could explode to the upside post-earnings as the bears rush to cover some of their short positions.
From a technical perspective, GDP is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been downtrending for the last month, with shares pushing lower from its high of $28.55 to its recent low of $22.14 a share. During that move, shares of GDP have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of GDP have started to rebound off that $22.14 low, and it's starting to move within range of triggering a near-term breakout trade post-earnings.
If you're bullish on GDP, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average of $25.16 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.80 million shares. If that breakout hits, then GDP will set up to re-test or possibly take out its next major overhead resistance levels at $28.47 to its 52-week high at $28.55 a share. Any high-volume move above those levels could then easily send shares of GDP well north of $30 a share.
I would simply avoid GDP 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 $22.14 to $20 a share with high volume. If we get that move, then GDP will set up to re-test or possibly take out its next major support level at its 200-day moving average of $16.96 a share.