TiVo

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My first earnings short-squeeze trade idea today is TiVo ( TIVO), which is set to release numbers on Wednesday after the market close. This company is a developer and provider of software and technology that enables the search, navigation and access of content across sources, including linear television, on-demand television, and broadband video. Wall Street analysts, on average, expect TiVo to report revenue of $54.32 million on a loss of 24 cents per share.

This company missed Wall Street estimates last quarter after they reported a loss of 17 cents per share versus estimates of a net loss of 15 cents per share. During the first quarter, TiVo reported a loss of $20.8 million from a profit of $139 million a year ago, missing Wall Street expectations. Revenue rose 48.1% to $67.8 million from $45.8 million. This company has averaged year-over-year revenue growth of 28.3% over the last four quarters.

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The current short interest as a percentage of the float for TiVo is pretty high at 9.6%. That means that out of the 122.5 million shares in the tradable float, 11.73 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2%, or by about 227,000 shares.

From a technical perspective, TIVO is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock formed a triple bottom back in June and July at $7.75, $7.76 and $7.81 a share. After forming that bottom, this stock broke out back above its 50-day moving average and hit a recent high of $9.48 a share. During that sharp move higher, shares of TIVO have been making higher lows and higher highs which is bullish price action. That move has now pushed TIVO within range of triggering a near-term breakout trade.

If you're bullish on TIVO, then I would wait until after they report earnings and look for long-biased trades if this stock can manage to break out above some near-term overhead resistance levels at $9.48 to $9.89 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1,925,340 shares. If we get that breakout, then look for TIVO to re-test and possibly take out its next significant overhead resistance level at $11 to $12 a share post-earning.

I would simply avoid TIVO or look for short-biased trades if after earnings it fails to trigger that breakout, and then moves back below its 50-day moving average of $8.51 a share with high volume. If we get that move, then TIVO will likely re-test and possibly take out some major support levels at $8 to $7.75 a share. Any high-volume move below $7.75 a share would be bearish, since it would mean TIVO has entered new 52-week-low territory.

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