An earnings short-squeeze candidate in the software sector is Nuance Communications ( NUAN), which is set to release numbers on Thursday after the market close. This company is a provider of voice and language solutions for businesses and consumers around the world. Wall Street analysts, on average, expect Nuance Communications to report revenue of $386.20 million on earnings of 36 cents per share. If you're looking for a stock that's trending strong heading into the quarter, then make sure to check out shares of Nuance Communications. This stock is trading just one point off its 52-week high of $29.96 as we head closer to their quarterly report this week. The current short interest as a percentage of the float for Nuance Communications sits at 6.2%. That means that out of the 232.77 million shares in the tradable float, 14.20 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 17.2%, or by about 2.08 million shares. From a technical perspective, NUAN is currently trading above its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong since it bottomed last August at $15.56 a share. During that uptrend, the stock has been consistently making higher lows and higher highs, which is bullish price action. Now the stock is within range of breaking out post-earnings if the company can give the bulls what they're looking for. If you're bullish on NUAN, I would wait until after it reports its earnings and buy some shares if it can manage to break out above major overhead resistance at $29.96 a share with heavy volume. Look for volume that's tracking in close to or above its three-month average volume of 4,100,590 shares. If we get that action, then look for NUAN to spike big since the stock will be trading in all-time high territory. I would avoid any long trades or look to short NUAN if the stock fails to break out post-earnings and then drops below $27.39 to $26.35 (50-day) on heavy volume. Target a drop back towards its 200-day moving average of $22.38 if the bears hammer this lower post-earnings with volume. Nuance shows up on a list of 13 Tech Stocks to Buy in 2012.