Hi-Crush Partners (HCLP) crossed both its short-term (50-day) and long-term (200-day) moving average after last week’s massive rally. That indicates a breakout, and the stock could continue to see positive momentum going forward.
Strong US drilling activity, a recent acquisition announcement, capex expansion, a distribution increase, and a strong earnings announcement might continue to drive positive momentum in HCLP stock.
HCLP has announced its preliminary results for the second quarter. It expects adjusted EBITDA of $80 million–$82.5 million. The midpoint is slightly higher than the consensus estimate of $80.1 million. Even if the partnership meets analysts’ estimate, that would represent a 202% year-over-year growth. HCLP is among the MLPs that are expected to see strong earnings growth in the second quarter.
The short interest in Hi-Crush Partners was 7.9 million shares as of July 27. On the same day, short interest in Hi-Crush Partners as a percentage of the float ratio was 10.5%, which was higher than the 30-day average of 9.4%. That might be a negative sentiment for Hi-Crush Partners stock. An increase in short interest amid the recent gains indicate that the market expects Hi-Crush Partners stock to fall. However, any rerating following the recent announcements could result in a sharp short-covering rally from here.