Another potential earnings short-squeeze candidate is biopharmaceutical player Amag Pharmaceuticals (AMAG - Get Report) which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Amag Pharmaceuticals to report revenue of $21.12 million on a loss of 7 cents per share.
The current short interest as a percentage of the float for Amag Pharmaceuticals stands at 3.1%. That means that out of the 15.97 million shares in the tradable float, around 673,000 shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 9.3%, or by about 57,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of AMAG could easily jump sharply higher post-earnings as the bears rush to cover some of their bets.
From a technical perspective, AMAG is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last two months, with shares moving lower from its high of $28.42 to its recent low of $20.03 a share. During that downtrend, shares of AMAG have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of AMAG have now started to rebound higher off that $20.03 low and it's quickly moving within range of triggering a near-term breakout trade post-earnings.
If you're bullish on AMAG, 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 its 200-day moving average of $23.05 to its 50-day moving average of $24.13 a share and then once it clears more near-term overhead resistance levels at $24.93 to $25.98 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 166,206 shares. If that breakout hits, then AMAG will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $28.42 to $32 a share.
I would avoid AMAG 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 $20.03 to $18.94 a share with high volume. If we get that move, then AMAG will set up to re-test or possibly take out its next major support level at its 52-week low of $15 a share.