Actuant

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One earnings short-squeeze play in the industrial goods sector is Actuant ( ATU), which is set to release numbers on Wednesday before the market open. This company manufactures industrial products and systems worldwide. Wall Street analysts, on average, expect Actuant to report revenue of $394.85 million on earnings of 46 cents per share.

This company beat Wall Street estimates last quarter after reporting earnings that were in line with estimates in the prior quarter. Revenue has been trending up for the past three quarters, by 17.4% in the third quarter, 12.4% in the second quarter and 4.3% in the first quarter.

The current short interest as a percentage of the float for Actuant is a rather large 13%. That means that out of the 63.15 million shares in the tradable float, 8.18 million are sold short by the bears.

From a technical standpoint, this stock is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been beaten down big since hitting its July high if $27.65 a share since its currently trading at just over $18 a share. That said, the stock has started to form a sideways basing pattern between $17.50 and $20.50 a share. If the lows of this basing pattern hold, then we could be seeing a near-term bottom for this stock.

If you want to buy this stock for an earnings short-squeeze, I would wait until after its report and buy the stock if $17.50 holds as support. As long as that level holds, I would jump into this name off of any strength. I would then add to any long position once this stock breaks out above its 50-day of $20.84 on strong volume. Look for volume that's tracking in close to or above its three-month average action of 967,000 shares. I would target a run back towards its 200-day of $25.37 if the bulls push this higher post-earnings.

I would short this name after its report only if it drops below that near-term support zone at $17.50 a share on big volume. Any high volume move below that level should set this stock up to trade down to $15 t o$14 a share or possibly even lower if the bears knock this down post-earnings.

If you liked this article you might like

What To Hold: 3 Hold-Rated Dividend Stocks CMTL, GMLP, IRET

3 Stocks Going Ex-Dividend Tomorrow: SRF, PHT, CMTL

3 Hold-Rated Dividend Stocks: ATAX, CMTL, KNOP

Weak On High Volume: Comtech Telecommunications (CMTL)

Comtech (CMTL) Stock Gets ‘Outperform’ Rating at BMO Capital