TASER International sags as Q2 gross margins disappoint

The second-quarter figures exceeded analysts' expectations, according to a survey by Thomson Reuters. The consensus estimate called for a deeper loss of 4 cents per share on just $19.13 million in revenue.

Unfortunately, the better-than-expected results haven't translated to any strength today in TASER shares. The stock was off more than 4% at its intraday nadir, and continues to wallow in negative territory.

From a technical perspective, though, the equity's prospects aren't too dim. TASER is currently poised to finish July above its 10-month moving average, which would mark the first monthly breach of this resistance level since December 2007. Additionally, the stock's pullback has so far been contained by new-found support at its 10-day trendline.

The security could pare some of its post-earnings losses if short sellers are prompted to take profits. Short interest on the shares jumped by 9% during the past month, and now accounts for 5.5% of TASR's available float. Should these bears decide to hit the exits, it would take seven days, at the stock's average daily trading volume, for all of these shorted shares to be covered.

Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.