Photronics Earnings Set to Steal the Show: A Contrarian Play?

Photronics (PLAB) is set to release its second-quarter earnings on August 26, just one day before Nvidia's highly anticipated report. While many investors will be focused on Nvidia's (NVDA) performance and the concerns surrounding hyperscalers' capital expenditures, Photronics might quietly climb the charts.

According to Schaeffer's Senior Quantitative Analyst Rocky White, PLAB is trading within 0.75 times the 320-day moving averages' 20-day average true range (ATR), after spending at least 80% of the previous two weeks and 80% of the prior 42 trading sessions above that trendline.

This setup has appeared nine other times over the last decade, resulting in a higher stock price one week later 67% of the time, averaging a 1.6% return. One month later, Photronics stock boasts a 2.2% return and 56%-win rate.

The stock has a history of making outsized post-earnings moves, with six of the last eight being higher, including an 8% gap last August. The options market is pricing in a 15.8% post-earnings move for Wednesday's trading.

Short interest is up 15% in the most recent reporting period, and the 4.50 million shares sold short account for 8% of the stock's total available float.