Perion Network

My final earnings short-squeeze trade idea today is digital media player Perion Network ( PERI), which is set to release numbers on Wednesday before the market open. There are currently no Wall Street analysts' estimates available for Perion Network.

The current short interest as a percentage of the float for Perion Network is rather high at 10.9%. That means that out of the 6.6 million shares in the tradable float, 1.01 million shares are sold short by the bears. This is a low float and high short interest situation, so any bullish earnings news could easily spark a big move higher for shares PERI post-earnings.

From a technical perspective, PERI is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways for the last month and change, with shares moving between $10.35 on the upside and $8.56 on the downside. A high-volume move above the upper-end of that range will likely trigger a major breakout trade for shares of PERI post-earnings.

If you're in the bull camp on PERI, 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 $9.64 to $10.35 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 416,317 shares. If that breakout triggers, then PERI will set up to re-test or possibly take out its next major overhead resistance levels at $11.65 to $13 a share.

I would simply avoid PERI 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 $9 to $8.56 a share with high volume. If we get that move, then PERI will set up to re-test or possibly take its next major support levels at $7.63 to $6.50 a share.

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.

RELATED LINKS:



Follow Stockpickr on Twitter and become a fan on Facebook.

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.

If you liked this article you might like

5 Stocks Under $10 in Breakout Territory

5 Stocks Set to Soar on Bullish Earnings

5 Dumbest Things 'April Fools' Quiz

4 Stocks Under $10 Spiking Higher