Synchronoss Technologies

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My final earnings short-squeeze trade idea is on-demand transaction management solutions provider Synchronoss Technologies ( SNCR), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Synchronoss Technologies to report revenue of $70.09 million on earnings of 25 cents per share.

On Jan. 16, Credit Suisse upgraded this stock to outperform from neutral, saying multiple factors set the company up to speed its revenue growth this year. The firm cited strong fourth-quarter smartphone sales at AT&T and a new $350 million multi-year contract with Verizon Wireless, beginning in the first half of this year.

The current short interest as a percentage of the float for Synchronoss Technologies is pretty high at 10.2%. That means that out of the 24.71 million shares in the tradable float, 3.02 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4%, or by about 116,000 shares.

From a technical perspective, SNCR is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last three months, with shares soaring higher from its low of $17.08 to its recent high of $24.61 a share. During that uptrend, shares of SNCR have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SNCR within range of triggering a major breakout trade post-earnings.

If you're in the bull camp on SNCR, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key overhead resistance levels at $24.61 to $25.33 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 220,677 shares. If we get that breakout, then SNCR will set up to re-fill some of its previous gap down zone from last May that started at $28 a share. Any high-volume move above $28 will then put $32 to $33.21 into range for shares of SNCR.

I would simply avoid SNCR 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 $23 to $22.42 a share with high volume. If we get that move, then SCNR will set up to re-test or possibly take out its next major support level at its 50-day moving average of $21.20 a share. Any high-volume move below $21.20 will then put $20 to $19 into range for shares of SCNR.

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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