Synacor

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My final earnings short-squeeze play today is computer services player Synacor ( SYNC), which is set to release numbers on Wednesday after the market close. This company is a provider of solutions for delivery of online content and services. Wall Street analysts, on average, expect Synacor to report revenue of $30.68 million on earnings of 4 cents per share.

This stock has been uptrending extremely strong as we approach its earnings report this week, with shares up over 150% so far in 2012. Despite that strong uptrend, shares of Synacor have recently pulled back off its 52-week high of $18 a share to its current price of around $12.80 a share.

The current short interest as a percentage of the float for Synacor is extremely high at 29.5%. That means that out of the 7.91 million shares in the tradable float, 2.96 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.8%, or by about 163,000 shares. If the bear are caught learning too hard into this quarter, and Synacor delivers the news the bulls are looking for, then we could get a monster short-squeeze post-earnings.

From a technical perspective, SYNC is currently trading right above its 50-day moving average, which is bullish. This stock has been on a tear for the last five months, with shares skyrocketing from its low of $4.75 to its recent high of $18 a share. During that move, shares of SYNC have consistently made higher lows and higher highs, which is bullish technical price action. That said, this stock recently moved back below its 50-day moving average of $12.82 with heavy volume and hit a near-term low of $10.86 a share.

If you're bullish on SYNC, then I would wait until after it reports earnings and look for long-biased trades if this stock manages to maintain a trend above its 50-day moving average of $12.82 a share with strong upside volume flows. Look for volume that registers near or above its three-month average action of 1,174,910 shares. If we get that move, then SYNC will have a great chance of re-testing and possibly taking out its next major overhead resistance levels at $15 to $18 a share.

I would simply avoid SYNC or look for short-biased trades if this stock fails to hold a trend above its 50-day, and then drops below some near-term support at $12 a share with heavy volume. If we get that action, then look for SYNC to re-test and possibly take out its next major support level at $10.86 a share post-earnings.

To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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