A Tight Fit for Crocs' Shorts

Crocs' third-quarter earnings came in well ahead of analyst estimates last week, and the resulting 6.5% gap up was likely due in part to some short-covering. The problem for shorts now is that the stock is bumping up against resistance around $40. If it can work its way through $40, it could get really ugly really quick for those betting against it.

Whether you're long or short, if you're running with the crowd, it gets much tougher to come out ahead. If you're wrong, you'll be trying to make it to the emergency exit with the rest of the crowd.

Some other interesting retail plays that have high short ratios are Under Armour (UARM) and NutriSystem (NTRI), although neither chart is set up for as big a potential upside breakout as Crocs.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider The Singing Machine to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

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