Another earnings short-squeeze play in the retail apparel complex is national specialty retailer Chico's FAS (CHS), which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Chico's FAS to report revenue of $548.89 million on earnings of 20 cents per share.
This company beat Wall Street estimates last quarter by 1 cent, so market players will be looking for another beat for this quarter. Chico's FAS' profits have trended higher year-over-year by an average of 29.3% over the last five quarters. Revenue has also trended higher for three consecutive quarters.The current short interest as a percentage of the float for Chico's FAS sits at 5.8%. That means that out of the 168.94 million shares in the tradable float, 9.88 million are sold short by the bears. The short-sellers have also been increasing their bets from the last reporting period by 19.6%, or by about 1.61 million shares. >>Stocks Rising on Unusual Volume From a technical standpoint, this stock is currently trading below its 50-day and 200-day moving averages, which is bearish. This stock was hammered by the sellers from its July high of $16.44 to a recent low of $10.52. That sharp selloff could setup a nice earnings-related pop in the stock if the sellers are done dumping shares. That pop started on Monday with the stock finishing up 2.3% on heavy volume to $11.61. The way I would play this name would be to wait until after it reports its earnings and buy the stock if it trades back above its 50-day at $12.27 on high volume. Look for volume that's tracking in close to or above its three-month average action of 2,949,980 shares. I would then add to any long position once the stock moves above some overhead resistance at $13.15 and the 200-day at $13.67 on heavy volume. Target a run back towards $14 to $15 a share if the bulls can set off a short-squeeze. I would consider shorting this stock after earnings only if it drops below some major near-term support at $10.50 a share on high-volume. If $10.50 is taken out post-earnings, then I would look for this stock to re-test the next significant support level at $8.10 a share.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV