5 Stocks Set to Soar on Bullish Earnings

The current short interest as a percentage of the float for Ubiquiti Networks is extremely high 77.5%. That means that out of the 8.19 million shares in the tradable float, 6.32 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 13.7%, or by about 760,000 shares. This stock has the potential for an explosive earnings short-squeeze since the float is so small and the short interest is so high.

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From a technical perspective, UBNT is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, from a low of $17.33 to a recent high of $35.32 a share. During that move, shares of UBNT have consistently made higher lows and higher highs, which is bullish technical price action. That move has now put UBNT within range of triggering a major breakout trade post-earnings.

If you're bullish on UBNT, I would wait until after it reports earnings and look for long-biased trades if this stock can manage to break out above $34.49 to $35.32 a share with high-volume. Look for volume on that move that registers near or well above its three-month average action of 356,952 shares. If we get that action, I would look for UBNT to hit $40 a share if the bulls gain full control of this stock post-earnings.

I would simply avoid UBNT or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then moves back below its 50-day moving average of $29.40 a share with high-volume. If we get that action, then look for UBNT to drop down towards $27 to $24 a share post-earnings if the bears hammer this lower.