Ubiquiti Networks

A wireless communications player that could be ready to deliver the shorts some major pain soon is Ubiquiti Networks (UBNT), which offers a portfolio of networking products and solutions for service providers and enterprises. This stock has been on fire over the last six months, with shares up big by 58%.

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The current short interest as a percentage of the float for Ubiquiti Networks is extremely high at 27.2%. That means that out of the 29.69 million shares in the tradable float, 5.26 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 16%, or by about 853,000 shares. This is another equity that sports a monster short interest and a very low float. What's even worse for the bears here is that shares of UBNT are very close to entering blue-sky territory, or new all-time-high territory.

If you take a look at the chart for Ubiquiti Networks, you'll notice that this stock has been uptrending strong for the last few weeks, with shares moving higher from its low of $37.50 to its intraday high of $46.51 a share. During that uptrend, shares of UBNT have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of UBNT back above its 50-day moving average and into breakout territory above some near-term overhead resistance at $45.31 a share. Shares of UBNT are now quickly approaching an even bigger breakout trade that could push the stock into new all-time-high territory.

Traders should now look for long-biased trades in UBNT if it manages to break out above its all-time high of $48 a share with high volume. Look for a sustained move or close above that level with volume that hits near or above its three-month average action of 1.05 million shares. If that breakout triggers soon, then UBNT will set up to enter new all-time-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $60 to $70 a share.

Traders can look to buy UBNT off any weakness to anticipate that breakout and simply use a stop that sits right below its 50-day at $42.54 a share or around more support at $42 a share. One could also buy UBNT off strength once it starts to clear its all-time high of $48 a share with volume and then simply use a stop that sits a comfortable percentage from your entry point.

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