Micros Systems

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Another potential earnings short-squeeze play is Micros Systems ( MCRS), which is set to release numbers on Thursday after the market close. This is a global designer, manufacturer, marketer, and servicer of enterprise information solutions for the global hospitality and retail industries. Wall Street analysts, on average, expect MICROS Systems to report revenue of $320.64 million on earnings of 58 cents per share.

The current short interest as a percentage of the float for MICROS Systems is rather high at 10.1%. That means that out of the 79.75 million shares in the tradable float, 8.05 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 16.1%, or by about 1.11 million shares. If the shorts are caught leaning too hard into this quarter, then we could easily see a solid short-covering rally develop post-earnings.

From a technical perspective, MCRS is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong for the last month and change, with shares spiking higher from its low of $39.31 to its recent high of $44.67 a share. During that uptrend, shares of MCRS have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed MCRS within range of triggering a major breakout trade post-earnings.

If you're bullish on MCRS, 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 at $44.67 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 871,243 shares. If that breakout triggers, then MCRS will set up to re-test or possibly take out its next major overhead resistance levels at $47 to its 200-day at $48.88 a share.

I would avoid MCRS or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day moving average of $42.85 a share with heavy volume. If we get that move, then MCRS will set up to re-test or possibly take out its next major support level at $41.50 a share. Any high-volume move below $41.50 will then put its 52-week low of $39.31 a share into range for shares of MCRS.

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