Wall Street Wants to Help You Help Your Favorite Charity

Damon Dahlen, AOL Last month, I sat down with my kids to watch that staple of holiday stop-motion specials, "Rudolph the Red-Nosed Reindeer." One of my favorite parts is when Rudolph and Hermey, Santa's shy elf who dreams of becoming a dentist, visit the Island of Misfit Toys, where outcast toys like a water pistol that shoots jelly and a cowboy who rides an ostrich have been exiled. A couple of years ago, another group of misfits, rejects and malcontents that went by the name Occupy Wall Street garnered the national spotlight with their accusations of greed run amok in America's financial community.

The remnants of Occupy Wall Street would do well to take a lesson from their bête noire ...

Despite the opportunity of a lifetime, these lovable losers -- who really weren't that lovable, or clean or articulate -- squandered their moment in the sun by performing endless drum circles instead of affecting real change. The only legacy they left was the tab to clean up their mess, which ran into the millions, and was picked up by you and me, the taxpayers. Meanwhile, the Fat Cats of Wall Street whom they railed against have continued to quietly give back to society. A case in point is the Robin Hood Foundation, a charity started by legendary hedge fund manager Paul Tudor Jones. Since its founding in 1988, Jones' foundation has distributed more than $1.25 billion to programs that help the neediest segments of New York's population. All administrative costs for the organization are paid for by its board of directors, which means 100 percent of the donations it receives go directly toward helping people. By the way, Robin Hood's board runs the gamut politically, with heavy hitters from the left such as Miramax founder Harvey Weinstein, and from the right, such as hedge fund star David Einhorn. Another relatively new charitable organization, Portfolios With Purpose, is also getting backing from some of the brightest minds and best investors on Wall Street, and is giving the public the ability to participate, as well. Its concept is simple: First you create a "fantasy" portfolio composed of five stocks -- long or short -- with a $1 billion minimum market cap. Then you choose a charity from its pre-vetted list that you want to compete on behalf of. There are hundreds of charities to chose from, including the Wounded Warrior Project, the Alzheimer's Foundation and St. Jude Children's Research Hospital. There are two categories in which the public can compete: "novice," which requires a $100 donation, and "professional," which requires a $1,000 donation. There's also an invitation-only "master" category, which requires a $10,000 donation and is a veritable "Who's Who" of Wall Street, with participants such as Einhorn, Leon Cooperman, Daniel Loeb, Karen Finerman and Kyle Bass. The contest is now under way and runs through the end of the year. The top three winners in each category will have a portion of the total entry fees donated to their chosen charity. The winners in both of the public categories also get the opportunity to attend a private lunch with the Master Class player of their choice, and all participants are invited to the organization's networking events, where select professionals share their market views. The remnants of Occupy Wall Street would do well to take a lesson from their bête noire as to how to create something like Portfolios With Purpose, which is both interesting and educational, engages the public, and actually does something good for people.

Is This the Next Twitter?

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

U.S. stocks are coming off a good week, with the benchmark S&P 500 gaining 2.3%, which puts it almost back at breakeven for the year. The narrower Dow Jones Industrial Average (DJINDICES: ^DJI) also gained 2.3%. Those aren't the sort of numbers to get growth investors' pulses racing, however. At the beginning of 2014, nine of my Foolish colleagues and I cited 10 companies that could be this year's Twitter (NYSE: TWTR  )  -- growth companies that could emulate the microblogger's stock market success. Today, Reuters reported that Spotify -- which didn't appear on our list, but certainly could have been a contender -- is signaling that it is preparing to join the public market.

The Swedish online streaming music service is seeking to hire an executive who will bring its financial reporting up to U.S. Securities and Exchange Commission standards. Companies must obtain SEC approval before they can go public.

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Like its closest publicly traded peer, Pandora Media (NYSE: P  ) , Spotify operates on a freemium model, wherein the company provides a basic service for free to anyone who will sign up, in the hope that some percentage of those users will eventually opt to upgrade to a paying package with additional features.

The problem for Spotify is that the side-by-side reviews with Pandora that I have seen suggest the the latter is more clever about the playlists it develops based on a single artist's name or a single song submitted by the user. The problem for both companies is that the newcomer to the field, iTunes Radio from Apple, has also gotten good at this and has a huge trove of data from iTunes purchases with which to perfect its algorithms. Add to that the fact that iTunes is part of Apple's broader entertainment ecosystem and you can see why I think Apple is a very credible threat to Pandora and Spotify.

That isn't stopping investors from valuing Pandora at a nosebleed-inducing 218 times next 12 months' earnings-per-share estimate. Not to mention that this multiple is calculated on adjusted earnings – on the basis of "as reported" earnings, analysts don't expect the company to turn an annual profit until 2015. Even using the $0.47 adjusted earnings-per-share estimate for 2014, that would still put the share price multiple at 77 times.

With those sort of multiples being bandied about as a comparable valuation, it would hardly be surprising if Spotify executives and investors want to take the company public. Still, I would recommend they do so sooner rather than later, as some air has yet to come out the social networking bubble.

Your Money: Look into tax time strategies now

The idea of myRA, a proposed starter account for retirement savings, received plenty of buzz when it was introduced by President Obama in his State of the Union address.

But the myRA won't be in place until much later this year. And some little-used retirement savings options are good to use now during tax season. Ever think of dedicating part of your tax refund to buy Series I savings bonds? Or taking a look at a saver's credit for IRA contributions?

"People should actually use the IRA," said Alicia H. Munnell, director of the Center for Retirement Research at Boston College. If someone doesn't have a 401(k) at their workplace, setting up an IRA is a good option.

MORE: Obama unveils new retirement savings plan

Munnell, who sees the myRA as a good idea, said using a tax refund to buy I Bonds is another way to easily set aside money.

Many people, she said, need to save money for retirement before they see that cash in their checking accounts, especially if they're on a tight budget. "If the money gets into their hands, there are real needs they have to spend it on," she said.

Some options for saving for retirement at tax time:

The Retirement Savings Contribution Credit or the Saver's Credit

Some low- to moderate-income taxpayers who file jointly could obtain an average tax credit of $215 on their federal income tax returns, if they qualify, and set aside money for retirement in IRAs or 401(k)s.

The maximum credit is up to $1,000 or up to $2,000 if filing jointly. Oddly, many taxpayers who could qualify do not even know about this credit, said Catherine Collinson, president for the Transamerica Center for Retirement Studies.

Fewer than one in four American workers with annual household incomes of less than $50,000 are aware of the credit, according to a survey from the nonprofit Transamerica Center.

You could take the credit if your adjusted gross income is $29,500 in 2013 or less if single, or $44,250 or less if you are head of a household! .

MORE: No need to be a hater over MyRA savings plans

The adjusted gross income can be as high as $59,000 to qualify for the credit in 2013, if married filing jointly. Income limits rise slightly for 2014.

To get the saver's credit on the 2013 return, eligible workers could still make qualifying retirement contributions until April 15 to set up a new individual retirement account or add money to an existing IRA for 2013.

If you might qualify, you need to realize that you cannot take the credit if you file a Form 1040EZ. So you'd want to file a Form 1040 or 1040A or 1040NR.

The credit is based on filing status, adjusted gross income, tax liability, and the amount contributed to qualifying retirement programs.

Single filers averaged about $128 for the credit in 2011, the most recent figures available, according to the Internal Revenue Service. Saver's credits totaling more than $1.1 billion were claimed on 6.4 million returns in tax-year 2011.

Marshall Hunt, certified public accountant and director of tax services for the Accounting Aid Society in metro Detroit, said some restrictions apply. The retirement savings credit, for example, is not available for taxpayers of any age who are full-time students or married taxpayers filing separately.

MORE: IRS has issued $64.5 billion in refunds so far

Taxpayers also must be 18 years old or older to qualify for the credit and not be claimed as a dependent on another person's return.

The credit is not refundable if you do not have a tax liability. The credit could increase your refund for taxes already paid or reduce the amount you would owe.

Dedicating part of a tax refund to buy Series I Savings Bonds

It is possible to buy Series I U.S. Savings Bonds with a portion or all of your federal tax refund for you — and for someone else, too, such as a child or grandchild.

The rest of your tax refund money could be deposited into another account — or mailed by paper check to you.

Th! e composi! te rate for Series I bonds issued Nov. 1, 2013, through April 30 is 1.38%. The fixed rate is 0.2% and an inflation adjustment is added on top of that. The fixed rate does not change for the life of the bond, but the inflation rate can and usually does change every six months.

You may use all or part of a tax refund to buy up to $5,000 in U.S. Series I Savings Bonds.

Paper savings bonds can be bought through the tax refund process in denominations of $50, $100, $200, $500, $1,000, and $5,000.

Or the taxpayer can set up an electronic TreasuryDirect account where I Bonds can be bought to the penny anywhere from $25 to $5,000 using tax refund money.

More often, of course, big tax refunds are used to buy big TVs or pay off big bills, not save big for retirement.

In 2012, as of mid-December, 36,244 taxpayers requested 174,809 savings bonds from their federal income tax refunds. The total purchase price came to $21.3 million, according to David Starck, a spokesman for the Department of the Treasury, Bureau of the Fiscal Service.

Yet buying even one savings bond, instead of just spending that refund, can build some savings. If we're going to hear more talk about saving for retirement, why not start a little extra savings now?

Contact Tompor at stompor@freepress.com

4 Stocks Under $10 Making Big Moves

DELAFIELD, Wis. (Stockpickr) -- At Stockpickr, we track daily portfolios of stocks that are the biggest percentage gainers and the biggest percentage losers.

>>5 Stocks Ready to Explode Higher

Stocks that are making large moves like these are favorites among short-term traders because they can jump into these names and try to capture some of that massive volatility. Stocks that are making big-percentage moves either up or down are usually in play because their sector is becoming attractive or they have a major fundamental catalyst such as a recent earnings release. Sometimes stocks making big moves have been hit with an analyst upgrade or an analyst downgrade.

Regardless of the reason behind it, when a stock makes a large-percentage move, it is often just the start of a new major trend -- a trend that can lead to huge profits. If you time your trade correctly, combining technical indicators with fundamental trends, discipline and sound money management, you will be well on your way to investment success.

>>5 Oversold Stocks Ready to Rebound

With that in mind, let's take a closer look at a several stocks under $10 that are making large moves to the upside.

Adamis Pharmaceuticals

Adamis Pharmaceuticals (ADMP), a biopharmaceutical company, engages in the development and commercialization of specialty pharmaceutical products in the therapeutic areas of oncology, immunology and infectious diseases, and allergy and respiratory. This stock closed up 0.94% to $6.45 in Thursday's trading session.

Thursday's Range: $6.17-$6.45

52-Week Range: $3.40-$17.00

Thursday's Volume: 128,000

Three-Month Average Volume: 71,305

From a technical perspective, ADMP trended modestly higher here right above some previous support levels at $6.15 to $6.20 with above-average volume. This stock has been trending sideways and consolidating for the last month and change, with shares moving between $6.15 on the downside and $7.25 on the upside. Shares of ADMP are now starting to trend within range of triggering a big breakout trade. That trade will hit if ADMP manages to take out its 50-day moving average of $6.89 to some more near-term overhead resistance levels at $7.10 to $7.25 with high volume.

Traders should now look for long-biased trades in ADMP as long as it's trending above those key near-term support levels at $6.20 to $6.15 and then once it sustains a move or close above those breakout levels with volume that hits near or above 71,305 shares. If that breakout hits soon, then ADMP will set up to re-fill some of its previous gap-down-day zone from December that started near $9.

Response Genetics

Response Genetics (RGDX), a life science company, engages in the research, development, marketing, and sale of pharmacogenomic tests for use in the treatment of cancer primarily in the U.S., Asia, and Europe. This stock closed up 1.4% to $1.44 in Thursday's trading session.

Thursday's Range: $1.37-$1.50

52-Week Range: $1.09-$2.93

Thursday's Volume: 461,000

Three-Month Average Volume: 330,847

From a technical perspective, RGDX bounced modestly higher here right off its 50-day moving average of $1.34 with strong upside volume. This move is starting to push shares of RGDX within range of triggering a major breakout trade. That trade will hit if RGDX manages to take out Thursday's high of $1.50 and then once it clears more key overhead resistance levels at $1.66 to its 200-day moving average at $1.68 with high volume.

Traders should now look for long-biased trades in RGDX as long as it's trending above its 50-day at $1.34 or above $1.30 and then once it sustains a move or close above those breakout levels with volume that hits near or above 330,847 shares. If that breakout hits soon, then RGDX will set up to re-test or possibly take out its next major overhead resistance levels at $2 to $2.20, or even $2.30 to $2.45.

SGOC Group

SGOCO Group (SGOC) engages in designing and developing LCD/LED monitors, TVs, and other application-specific products for sale primarily to the flat-panel display market in China. This stock closed up 6.7% to $3.48 in Thursday's trading session.

Thursday's Range: $3.24-$3.60

52-Week Range: $0.70-$8.33

Thursday's Volume: 410,000

Three-Month Average Volume: 372,995

From a technical perspective, SGOC ripped higher here back above its 50-day moving average of $3.40 with above-average volume. This stock recently formed a double bottom chart pattern at $2.95 to $2.98. Following that bottom, shares of SGOC have now started to spike sharply higher and move within range of triggering a big breakout trade. That trade will hit if SGOC manages to take out some near-term overhead resistance levels at $3.61 to $3.87 and then $4.20 with high volume.

Traders should now look for long-biased trades in SGOC as long as it's trending above Thursday's low of $3.24 or above $3 and then once it sustains a move or close above those breakout levels with volume that hits near or above 372,995 shares. If that breakout hits soon, then SGOC will set up to re-test or possibly take out its next major overhead resistance levels at $4.50 to $5.50.

Delcath Systems

Delcath Systems (DCTH) operates as a specialty pharmaceutical and medical device company focusing on the field of oncology. This stock closed up 4.8% to 32 cents per share in Thursday's trading session.

Thursday's Range: $0.30-$0.33

52-Week Range: $0.22-$2.19

Thursday's Volume: 3.49 million

Three-Month Average Volume: 3.96 million

From a technical perspective, DCTH bounced notably higher here right off its 50-day moving average of 29 cents per share with decent upside volume. This stock recently formed a major bottom chart pattern, after shares of DCTH found buying interest over the last month at around 28 to 29 cents per share. Shares of DCTH are now starting to move within range of triggering a big breakout trade above a key downtrend line. That trade will hit if DCTH manages to take out some near-term overhead resistance levels at 33 cents to its 50-day moving average at 36 cents per share and then once it clears more resistance at 37 cents to 39 cents per share with high volume.

Traders should now look for long-biased trades in DCTH as long as it's trending above some key near-term support at 28 cents per share and then once it sustains a move or close above those breakout levels with volume that hits near or above 3.96 million shares. If that breakout hits soon, then DCTH will set up to re-test or possibly take out its next major overhead resistance levels at 47 cents to 55 cents per share.

To see more stocks that are making notable moves higher, check out the Stocks Under $10 Moving Higher portfolio on Stockpickr.

-- Written by Roberto Pedone in Delafield, Wis.

RELATED LINKS:

>>5 Stocks Under $10 Set to Soar

>>5 Tech Stocks to Trade for Gains This Week

>>5 Dividend Stocks That Want to Give You a Raise in 2014

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 Delafield, 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.

Twitter Inc (TWTR) Earnings CSI – Shortsighted Wall Street Reaction?

So, Twitter Inc (NYSE:TWTR) got walloped because Wall Street is concerned with user growth. How fleeting beauty can be for the share-beholder. Now the 140 character, social site's nose is broken and bloody. Is it time for investors to consider buying the battered stock or run the other way.

Let's examine the financial statements and charts to mark out the pros and cons.

The first thing we notice is the enormous jump in costs on the income statement, most of which could payoff in the long run. Revenue grew by 116%; meanwhile, the "bad" costs such as cost of revenue increased by 205.14% and general and administrative expenses skyrocketed 350.88%. Overall, the two accounted for 74.25% of revenue for 2013 versus 46.24% in 2012.

[Related -Twitter Inc (TWTR): Should You Buy It?]

Despite cost of revenue and general and administrative expenses outrunning sales, had management been able to keep the pair in-line with revenue growth, it would have only added $0.13 to the bottom-line; although, a $0.16 bullish surprise would have looked better than $0.03 surprise reported.

Now on to the "good" costs: research & development (R&D) and sales & marketing. Unless management misfires on both, investors should eventually reap rewards from these line items. We noticed a similar pattern in Facebook Inc's (NASDAQ:FB) initial earnings report. At the time, iStock forecasted better days ahead of the king of social sites while the rest of the world was dumping on FB. Facebook was trading around $23 when we wrote Facebook (FB) Earnings - What The Market Is Ignoring About It.

[Related -Twitter Inc (TWTR) Q4 Earnings Preview: What To Watch?]

Similar to FB, Twitter's sales and marketing went into orbit, vertically climbing 515.98% year-over-year (YoY). While that's staggering, R&D went all moon shot, up 878.8% YoY.

Once again, had management left the debit card home once in a while and increased R&D and sales and marketing at the same pace as revenue, it would have added $0.78 to earnings. In total, less aggressive spending on the good and bad costs add up to $0.91 per share. Imagine Wall Street's reaction had Twitter posted a bullish surprise of $0.94 – do you think the stock would have tanked nearly 25%? We don't - no matter if nobody new signed up.

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As for where the slide might come to an end, $45 is a firm level of support as the stock finished its first day of trading at $44.90. If $45ish has holes in the safety net, then $39-$40 could come into play. From our experience, the initial waterfall usually accounts for 90% of earnings driven selloffs, which means TWTR probably drifts lower for a little while, catches a bottom (most likely intra-day), and then reverses higher.

If the stock continues to backpedal, you'll know that bulls are ready to take charge again when the stock closes above $51ish. On the other hand, our experience says not to trust an immediate U-turn.

Overall: Twitter Inc's (TWTR) announcement shows management is committed growing in the future, which should ease the worries of user growth. Additionally, the income statement reveals plenty of wiggle room for the executive team to produce explosive earnings surprises in upcoming quarterly checkups, provided they can temper the urge to splurge. 

Ex-Microsoft manager accused of insider trading

SEATTLE (AP) — Federal authorities filed criminal and civil charges Thursday against a former Microsoft manager, saying he fed inside information to a day trader who used it to clear $393,000 in illicit transactions.

Brian Jorgenson, 32, was a senior manager in Microsoft's Treasury Group when he provided the information to his friend Sean Stokke, 28, according to documents filed in U.S. District Court in Seattle. They're accused of trading on three corporate developments: two recent quarterly earnings reports, and Microsoft's 2012 investment in Barnes & Noble.

"Brian's approach to this is, he needs to make it right," said Jorgenson's attorney, Angelo Calfo. "He made a really bad decision, and he's prepared to take his medicine."

A message seeking comment was left for Stokke's attorney, Jennifer Horwitz.

The pair planned to use the proceeds to open their own biotech hedge fund, FBI agent Kathleen Moran wrote in the criminal complaint, which charges Jorgenson and Stokke with 35 counts of insider trading.

Both confessed when questioned, Moran wrote, adding that Stokke said he had given Jorgenson about $50,000 in cash out of the proceeds, in $10,000 increments, packed into envelopes.

The pair accumulated Barnes & Noble stock options in advance of Microsoft's announcement that it was investing in the company's digital book business, the FBI said. The announcement caused Barnes & Noble's stock to jump by nearly half, and the pair made $184,000.

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They're also accused of trading on Microsoft's failure to meet earnings expectations in the fourth quarter of fiscal 2013 and Microsoft's increased first-quarter profit in fiscal 2014.

"For every stock market winner, there is a loser, and trading on confidential inside information is a cheater's way of gaining at the expense of others," Seattle U.S. Attorney Jenny Durkan s! aid in a news release. "This conduct hurts companies, hurts individuals, and shakes faith in our financial markets.

Jorgenson, a married father of four from the north Seattle suburb of Lynnwood, joined Microsoft in January 2011. He is hoping to be allowed to speak to Microsoft employees to share his cautionary tale, Calfo said. Jorgenson expects to plead guilty in a deal with prosecutors, the lawyer said.

Microsoft said in a written statement that the company has no tolerance for insider trading. "We helped the government with its investigation and terminated the employee," the statement said.

The Securities and Exchange Commission filed related civil charges. The agency is seeking unspecified penalties and restitution from Jorgenson and Stokke, and seeks to have Jorgenson barred against serving as an officer or director of any public company.

"Abusing access to Microsoft's confidential information and generating unlawful trading profits is not a wise or legal business model for starting a hedge fund," Daniel Hawke, head of the SEC enforcement division's market abuse unit, said in a statement.

Follow Gene Johnson on Twitter @GeneAPseattle .

AP Business Writer Marcy Gordon in Washington, D.C., contributed to this report.

5 Stocks Set to Soar on Bullish Earnings

DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

>>5 Rocket Stocks to Buy Before 2014

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

>>Buy the Dips: This Bull Market's Not Over

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting technically very bullish and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if The Street doesn't like the numbers or guidance.

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

>>5 Stocks Poised for Breakouts

With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.

Ciena

My first earnings short-squeeze play is communications networking equipment, software and services provider Ciena (CIEN), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Ciena to report revenue of $568.51 million on earnings of 24 cents per share.

Recently, FBR Capital's Scott Thompson reiterated his outperform rating and $30 price target on shares of Ciena. Thompson hiked his revenue estimate for the fourth quarter to $580 million from $568 million and raised his EPS estimate by a penny to 25 cents.

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The current short interest as a percentage of the float Ciena is very high at 18.6%. That means that out of the 93.41 million shares in the tradable float, 19.42 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of CIEN could easily skyrocket post-earning as the bears rush to cover some of their bets.

From a technical perspective, CIEN 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 uptrending over the last few weeks, with shares moving higher from its low of $21.25 to its recent high of $24 a share. During that uptrend, shares of CIEN have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of CIEN within range of triggering a big breakout trade post-earnings.

If you're bullish on CIEN, 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 $24 to its 50-day moving average of $24.12 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.25 million shares. If that breakout hits, then CIEN will set up to re-test or possibly take out its 52-week high at $27.94 a share. Any high-volume move above that level will then give CIEN a chance to trend north of $30 a share.

I would simply avoid CIEN 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 $22.50 to $21.50 a share with high volume. If we get that move, then CIEN will set up to re-test or possibly take out its next major support level at its 200-day moving average of $20.35 a share. Any high-volume move below that level will then give CIEN a chance to tag $19 to $18 a share post-earnings.

Lululemon Athletica

Another potential earnings short-squeeze trade idea is technical athletic apparel designer and retailer Lululemon Athletica (LULU), which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Lululemon Athletica to report revenue $376.15 million on earnings of 41 cents per share.

Just this morning, Credit Suisse said the new CEO hire at Lululemon Athletica of Laurent Potdevin is a solid one given his strong brand management and consumer engagement. The firm has an outperform rating on the stock and a $78 per share price target.

>>5 Big Trades to Take in December

The current short interest as a percentage of the float for Lululemon Athletica is very high at 17.8%. That means that out of the 134.39 million shares in the tradable float, 17.81 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4.2%, or by 739,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of LULU could soar sharply higher post-earnings as the bears jump to cover some of their short positions.

From a technical perspective, LULU is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last month, with shares moving higher from its low of $65.72 to its recent high of $72.22 a share. During that uptrend, shares of LULU have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of LULU within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on LULU, 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 $72.22 to $74 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2.73 million shares. If that breakout hits, then LULU will set up to re-test or possibly take out its next major overhead resistance level at $77.75 a share. Any high-volume move above $77.75 will then give LULU a chance to re-fill some of its previous gap down zone from June that started at $82.50 a share.

I would simply avoid LULU 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 $68 to $67 a share with high volume. If we get that move, then LULU will set up to re-test or possibly take out its next major support levels at $63.50 to $62 a share. Any high-volume move below those levels will then give LULU a chance to tag $59 to $58 a share.

Oxford Industries

One potential earnings short-squeeze candidate is men's apparel player Oxford Industries (OXM) which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Oxford Industries to report revenue of $199.55 million on earnings of 11 cents per share.

>>4 Stocks Breaking Out on Big Volume

The current short interest as a percentage of the float for Oxford Industries is notable at 4.8%. That means that out of the 14.31 million shares in the tradable float, 824,000 shares are sold short by the bears. This stock has a decent short interest combined with a very low tradable float. Any bullish earnings news could easily spark a sharp short-covering rally for shares of OXM post-earnings.

From a technical perspective, OXM is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last six months, with shares moving higher from its low of $57.55 to its recent high of $75.82 a share. During that move, shares of OXM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of OXM within range of triggering a near-term breakout trade post-earnings.

If you're bullish on OXM, 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 $75.13 to its 52-week high at $75.82 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 65,333 shares. If that breakout hits, then OXM will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $80 to $85, or even $90 a share.

I would avoid OXM 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 $72.55 to its 50-day moving average at $71.27 a share with high volume. If we get that move, then OXM will set up to re-test or possibly take out its next major support levels $66 to its 200-day moving average at $64.07 a share. Any high-volume move below $64.07 will then give OXM a chance to tag $61 to $60 a share.

Vera Bradley

Another earnings short-squeeze prospect is producer, marketer and retailer of functional accessories for women Vera Bradley (VRA), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Vera Bradley to report revenue of $129.27 million on earnings of 33 cents per share.

>>5 Stocks Under $10 Set to Soar

The current short interest as a percentage of the float for Vera Bradley is extremely high at 62.1%. That means that out of the 21.57 million shares in the tradable float, 12.92 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.1%, or by 400,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of VRA could explode sharply higher post-earnings as the bears rush to cover some of their short bets.

From a technical perspective, VRA is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last three months, with shares moving higher from its low of $17.27 to its recent high of $25.72 a share. During that move, shares of VRA have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of VRA within range of triggering a big breakout trade post-earnings.
If you're bullish on VRA, 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 $25.25 to $25.72 a share, and then once it takes out its 52-week high at $27.15 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 531,823 shares. If that breakout hits, then VRA will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $34 to $35 a share.
I would simply avoid VRA or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below both its 50-day at $22.82 and its 200-day at $22.31 a share high volume. If we get that move, then VRA will set up to re-test or possibly take out its next major support levels at $20 to $19 a share. Any high-volume move below those levels will then give VRA a chance to tag its 52-week low at $17.27 a share.

Quiksilver

My final earnings short-squeeze play is men's sports clothing player Quiksilver (ZQK), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Quiksilver to report revenue of $516.19 million on earnings of 4 cents per share.

The current short interest as a percentage of the float for Quiksilver is very high at 16.3%. That means that out of the 118.02 million shares in the tradable float, 18.21 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.3%, or by 608,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of ZQK could rip sharply higher post-earnings as the bears jump to cover some of their short positions.

From a technical perspective, ZQK is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last three months and change, with shares soaring higher from its low of $4.81 to its recent high of $9.29 a share. During that uptrend, shares of ZQK have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of ZQK within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on ZQK, 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 $8.96 to its 52-week high at $9.29 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.68 million shares. If that breakout hits, then ZQK will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $12 to $13, or even $15 a share.

I would avoid ZQK or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day at $8.01 a share to more near-term support levels at $7.85 to $7.33 a share with high volume. If we get that move, then ZQK will set up to re-test or possibly take out its next major support level at its 200-day moving average of $6.86 a share to more support at $6.50 a share. Any high-volume move below $6.50 to $6 will then give ZQK a chance to re-fill a previous gap up zone from September that started at $5.25 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 Delafield, Wis.

RELATED LINKS:

>>2 Health Care Stocks to Watch

>>5 Hated Earnings Stocks You Should Love

>>5 Stocks Insiders Love Right Now

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 Delafield, 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.

Closing arguments begin in Martoma trial

NEW YORK — Former SAC Capital portfolio manager Mathew Martoma conspired to get secret drug-trial data and then use it for lucrative insider trading, the government charged Monday in closing arguments of the closely-watched criminal case.

Martoma cultivated relationships with two doctors who were privy to key results of the drug testing, Assistant U.S. Attorney Eugene Ingoglia said during a roughly 1 hour and 45 minute statement before a federal courtroom packed with spectators.

The doctors' knowledge provided Martoma, 39, with the proverbial "canary in a coal mine" — advance notice of secret information not available to other investors, said Ingoglia.

Closing the government's case, Ingoglia led jurors through what he termed an "avalanche of evidence" that proved Martoma's involvement in the most lucrative insider trading case in history.

"The evidence in this case leads to one and only one conclusion: That Mathew Martoma is guilty as charged."

Defense attorneys were scheduled to give their closing argument Monday afternoon. Judge Paul Gardephe is then expected to instruct the panel on the law before deliberations.

The nearly month-long trial focused on allegations that Martoma developed relationships with the doctors, Joel Ross and Sidney Gilman, involved in clinical testing of an Alzheimer's disease drug being developed by pharmaceutical firms Elan and Wyeth.

Ross and Gilman testifying under non-prosecution agreements said they illegally gave Martoma non-public information in 2008 about disappointing results from the tests.

Martoma allegedly relayed the information to SAC Capital chief Steven Cohen before Elan and Wyeth publicly disclosed the data. The government charges that the giant hedge fund then dumped its roughly $700 million stake in the drug firms' stocks, reaping approximately $276 million in combined losses and avoided losses.

Martoma's defense team strategy largely focused on trying to characterize Gilman, Ross and other prosecution ! witnesses as unreliable. The defense also presented evidence intended to show that any data Martoma got from the doctors was already public. Additionally, the defense contended Martoma had no role in SAC's selling of the pharmaceutical stocks.

Martoma did not testify in his own defense.

What's Dragging on Fusion-IO (FIO)?

NEW YORK (TheStreet) -- Fusion-IO (FIO) hasn't had a great 2013. The technology company has said goodbye to its CFO and sales chief, seen numerous ratings cuts from investment firms, and reported several quarters of disappointing guidance. Since January, the stock has tumbled 58.6%.

To add to its woes, on Tuesday UBS downgraded Fusion-IO to "neutral" from "buy," and slashed its price target to $11 from $15 in the process.

"Following the management change, we had thought the stock price decline discounted Fusion's challenges, but that proved incorrect," said analyst Steven Milunovich in the report. "We worry the window for Fusion to succeed is closing."

UBS said Fusion's foothold in PCI card production is slipping as new rivals emerge and that redeveloping any product will take another six to nine months to pay off. "PCI cards have a place, but larger vendors such as EMC  (EMC) and Western Digital (WD) ... can drive margins down, perhaps below the low-50s gross margin that Fusion currently is projecting," wrote Milunovich. Erasing some of the uncertainty surrounding Fusion's future, the Salt Lake City-based business has hired Ian Whiting as its sales chief. Whiting will leave a similar role at networking equipment maker Riverbed (RVBD) for the position. The company is still searching for a replacement CFO. By mid-afternoon, Fusion shares had tumbled 5.3% to $9.48. TheStreet Ratings team rates Fusion-IO Inc as a Sell with a ratings score of D. The team has this to say about their recommendation: "We rate Fusion-IO Inc (FIO) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share." Highlights from the analysis by TheStreet Ratings Team goes as follows: The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Computers & Peripherals industry. The net income has significantly decreased by 809.3% when compared to the same quarter one year ago, falling from $3.93 million to -$27.9 million. Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Computers & Peripherals industry and the overall market, Fusion-IO Inc's return on equity significantly trails that of both the industry average and the S&P 500. Net operating cash flow has significantly decreased to -$17.15 million or 159.81% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower. Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 59.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 800% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now. Fusion-IO Inc has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, Fusion-IO Inc reported poor results of -39 cents a share vs. -8 cents a share in the prior year. This year, the market expects an improvement in earnings (-30 cents vs. -39 cents). You can view the full analysis from the report here: FIO Ratings Report Also see: The 10 Drunkest States in America... and the 10 most sober.

PIMCO’s Still Bullish on the Canadian Dollar

The role reversal between the Canadian and US central banks over the past seven months means the Canadian dollar could remain weak for some time. In October, the Bank of Canada (BoC) responded to the country’s sluggish economy by abandoning its upward bias toward interest rates, which turned what had been a measured decline in the currency into a sharp selloff.

The BoC’s hawkish stance toward monetary policy had been rare among its developed-world peers and was a primary source of the loonie’s strength, until the US Federal Reserve announced it was planning to curtail its extraordinary stimulus. Now the Fed is set to commence a second round of tapering, suggesting that it believes the US economy is finding its footing. Meanwhile, the BoC has become increasingly concerned about Canada’s persistent disinflation, even though it raised its forecast for growth this year.

However, this week Pacific Investment Management Co, better known as PIMCO, reminded investors of the bigger picture with regard to Canada and its declining currency. The asset manager reiterated its long-term bullishness toward the Canadian dollar, citing the country’s “strong economic fundamentals, prudent fiscal situation and long history of the ‘rule of law.’” PIMCO, with $1.92 trillion of assets under management, is one of the largest asset managers in the world, so its investment outlook carries considerable weight.

It believes the country’s attractive fundamentals mean the Canadian dollar will continue to enjoy reserve status among government and other quasi-sovereign funds. As such, PIMCO says it expects to buy the loonie on dips this year.

To be sure, that doesn’t mean PIMCO doesn’t acknowledge the challenges facing the Canadian economy, including the country’s overextended consumers, inflated housing market, and the central bank’s aforementioned concern over disinflation. But it believes the housing market won’t suffer the type of crash that happened in the US. Instead, PIMCO sees a multi-year correction, with the first phase of the decline beginning this year.

And on the disinflation front, the asset manager says that Canada’s lower exchange rate will push up the price of imports. Meanwhile, it believes the effect of price competition among retailers, which was cited by the BoC as one of the main sources of disinflation, should also prove ephemeral.

So long-term investors should be cheered by PIMCO’s support for the currency, even if in the short term the lower exchange rate has been a drag on returns, while also paring income from dividends. But while the BoC and other policymakers would likely welcome a further decline in the currency to boost the country’s export sector, the good news is that most of the damage has already been done.

The loonie currently trades just below USD0.90, off about 10.6 percent from its trailing-year high and down about 15.2 percent from this cycle’s high back in mid-2011. At present levels, the Canadian dollar trades near the consensus forecast for the currency over the next several years, which ranges from USD0.90 to USD0.93 according to Bloomberg’s survey of institutional economists.

The effect of a lower exchange rate should eventually be offset when an improving economy, spurred by an export market whose products are priced more competitively, finally flows through to companies and their share prices. For now, Canadian equities offer a relative value compared to the US market, and building enduring wealth is all about buying stocks when they trade at a bargain.