A potential earnings short-squeeze trade is retailer of urban fashion apparel and accessories Citi Trends (CTRN), which is set to report results on Tuesday before the market open. Wall Street analysts, on average, expect Citi Trends to report revenue of $143.49 million on a loss of 37 cents per share. This beaten-down stock was trading over $16 a share in July, and it is now changing hands at around $10.40.
The current short interest as a percentage of the float for Citi Trends is notable at 7.8%. That means that out of the 13.31 million shares in the tradable float, 1.13 million shares are sold short by the bears. This stock has an extremely small float and a decent short interest. Any bullish earnings news could easily set this off to the upside since the stock is so beaten-down.>>5 Stocks Under $10 With Big Upside Potential From a technical standpoint, this stock is currently trading well below its 200-day moving average and below its 50-day moving average, which is bearish. This stock recently sold off from $13.37 to its current price of just over $10.40 a share. The stock has some major previous support that sits right around $9.65 a share. The near-term resistance on CTRN is at $11 a share. If you're bullish on this stock, I would wait until after it report its results and buy the stock once it clears $11 on high volume. Look for volume that's tracking in close to or above its three-month average action of 100,092 shares. I would then add to any long positions once the stock takes out its 200-day moving average of $11.79 with strong volume. Target a run back toward $12.50 or possibly higher if the bulls push this name up post-earnings. I would avoid any long trades or would get short this stock after earnings if shares drop below that major support zone at $9.65 on heavy volume. I would target a drop back towards its next significant support level at $7 a share if the bears smack this lower post-earnings.
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