8x8

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Another earnings short-squeeze prospect is voice over Internet protocol (VoIP) technology and services provider 8x8 ( EGHT), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect 8x8 to report revenue of $28.28 million on earnings of 6 cents per share.

The current short interest as a percentage of the float for 8x8 is notable at 7.6%. That means that out of the 62.14 million shares in the tradable float, 5.22 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8.1%, or by about 390,000 shares. If the bears are caught leaning too strong into a bullish quarter, then shares of EGHT could easily jump significantly higher post-earnings.

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From a technical perspective, EGHT 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 two months and change, with shares pushing higher from its low of $6 to its intraday high of $7.70 a share. During that uptrend, shares of EGHT have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of EGHT within range of triggering a near-term breakout trade post-earnings.

If you're bullish on EGHT, 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 $7.95 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 606,318 shares. If that breakout triggers, then EGHT will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $9 to $10 a share, or even $11 a share.

I would avoid EGHT 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 $7.40 to its 50-day at $7.10 a share with high volume. If we get that move, then EGHT will set up to re-test or possibly take out its next major support levels at its 200-day of $6.71 a share.

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