Intel

My final earnings short-squeeze trade idea today is semiconductor chip maker Intel ( INTC), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Intel to report revenue of $13.76 billion on earnings of 45 cents per share.

During the last quarter, Intel beat Wall Street estimates by 10 cents, after reporting a net income of 60 cents per share versus the estimate of a profit of 50 cents per share. That marked the fourth straight quarter where the company beat Wall Street estimates.

The current short interest as a percentage of the float for Intel stands at 4.3%. That means that out of the 4.97 billion shares in the tradable float, 215.50 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a solid short squeeze if Intel can deliver the earnings news the bulls are looking for.

From a technical perspective, INTC is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been uptrending modestly for the last two months, with shares moving higher from its low of $19.23 to its recent high of $22.13 a share. During that uptrend, shares of INTC have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed INTC within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on INTC, 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 $22.31 to $23 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 48.9 million shares. If that breakout triggers, then INTC will set up to re-test or possibly take out its next major overhead resistance levels at $23.96 to $24.84 a share. Any move above $24.84 will then put $26 to $26.63 into focus for shares of INTC.

I would avoid INTC 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 $21 to its 50-day at $20.63 a share with heavy volume. If we get that move, then INTC will set up to re-test or possibly take out its next major support levels at $20.16 to $19.42 a share. Any move below $19.23 a share will then push INTC into new 52-week-low territory, which is bearish technical price action.

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 technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com and Forbes.com. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.

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