Children's Place Retail Stores
An earnings short-squeeze play in the retail apparel complex is pure-play children's specialty apparel retailer Children's Place Retail Stores (PLCE), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Children's Place Retail Stores to report revenue of $469.09 million on earnings of $1.27 per share.
This is another stock that's trading in a tight sideways pattern as we get closer to its quarterly report. A move outside of that pattern between $50 and $45 will set this stock up for a big move post-earnings. If that move is above $50, then we are going to see a big short-squeeze since this stock is so heavily shorted.The current short interest as a percentage of the float for Children's Place Retail Stores is massive at 23.7%. That means that out of the 21.34 million shares in the tradable float, 5.85 million are sold short by the bears. This is a low float high short interest situation. Any bullish earnings news and this stock is going to spike big. >>5 Retail Stocks to Trade for Gains This Week From a technical standpoint, this stock is currently trading right at its 200-day moving average and above its 50-day moving average, which is neutral trendwise. This stock plunged from its July high of $49.93 to a recent low of $36.96 a share. Since marking that low, the stock rebounded big and in early October hit $49.96. The stock is now trading in a sideways pattern as it gets ready to enter its next big trend. If you want to play Children's Place for an earnings short-squeeze play, I would look to be a buyer after it reports if we see a breakout above $50 a share on heavy volume. Look for volume that's tracking in close to or above its three-month average action of 671,800 shares. If we get that breakout post-earnings, then I would target a run back towards the 52-week high of $55.90. I would only get short this stock after they have reported earnings if shares drop back below its 50-day moving average of $46.36 on heavy volume. I would then add to any short position if this stock takes out $45 to $44 a share on strong volume. Target a drop back towards $41 to $40 if the bears whack this lower post-earnings.
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