Take-Two Interactive Software

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My final earnings short-squeeze play is videogame maker Take-Two Interactive Software ( TTWO), which is set to release numbers on Monday after the market close. Wall Street analysts, on average, expect Take-Two Interactive Software to report revenue of $280.36 million on earnings of 23 cents per share.

The current short interest as a percentage of the float for Take-Two Interactive Software is very high at 16.1%. That means that out of the 61.01 million shares in the tradable float, 14.11 million shares are sold short by the bears. This stock sports a high short interest and a relatively low float. Any bullish earnings news could easily set off a sharp move higher for shares of TTWO post-earnings.

From a technical perspective, TTWO 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 month, with shares moving higher from its low of $14.08 to its recent high of $16.68 a share. During that uptrend, shares of TTWO have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TTWO within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on TTWO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $16.68 a share and then once it clears some past resistance at $16.99 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.57 million shares. If that breakout triggers, then TTWO could easily trade up to or north of $20 a share post-earnings.

I would simply avoid TTWO or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day at $15.53 a share with high volume. If we get that move, then TTWO will set up to re-test or possibly take out its next major support levels at $14.87 to $14.08 a share. Any high-volume move below $14.08 will then put $13.50 into range for shares of TTWO.

To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Madison, Wis.

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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Madison, Wis., 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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