This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Earnings Stocks That Could Squeeze the Bears

Stocks in this article: SIGM LAVA JOSB ZUMZ OVTI LULU ZOLT ULTA

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

WINDERMERE, Fla. ( Stockpickr) -- With earnings season under way on Wall Street, it's time for market-players to create a powerful watch list of stocks due to report numbers that are also heavily shorted by the bears.

As a shorted stock produces earnings that please the bulls, the short-sellers will rush to cover their positions, sparking a big rally. The gains can be so outsized that it only takes a few of these stocks in a year to ramp up portfolio returns significantly.

That said, let's not forget that stocks are heavily shorted for a reason. Use trading discipline and sound money management when playing earnings short-squeeze candidates. Sometimes the best play is to wait for the stock to break out. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move. But if you buy prior to the report, buy only if you have a very strong conviction that the stock is going to rip higher, and its acting extremely bullish technically.

  • Also see: 7 Smaller Stocks Beating the Big Guys

  • Here's a look at a number of stocks that could experience big short squeezes when they report earnings this week.

    1 of 6

    Check Out Our Best Services for Investors

    Action Alerts PLUS

    Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

    Product Features:
    • $2.5+ million portfolio
    • Large-cap and dividend focus
    • Intraday trade alerts from Cramer
    Quant Ratings

    Access the tool that DOMINATES the Russell 2000 and the S&P 500.

    Product Features:
    • Buy, hold, or sell recommendations for over 4,300 stocks
    • Unlimited research reports on your favorite stocks
    • A custom stock screener
    Stocks Under $10

    Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

    Product Features:
    • Model portfolio
    • Stocks trading below $10
    • Intraday trade alerts
    Try it NOW
    Try it NOW
    Try it NOW

    Check Out Our Best Services for Investors

    Dividend Stock Advisor

    Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

    Product Features:
    • Diversified model portfolio of dividend stocks
    • Updates with exact steps to take - BUY, HOLD, SELL
    Trifecta Stocks

    Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

    Product Features:
    • Model Portfolio
    • Intra Day Trade alerts
    • Access to Quant Ratings
    Options Profits

    Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

    Product Features:
    • Actionable options commentary and news
    • Real-time trading community
    Try it NOW
    Try it NOW
    Try it NOW
    To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
    Submit an article to us!

    Markets

    DOW 17,590.21 +233.34 1.34%
    S&P 500 2,039.82 +26.93 1.34%
    NASDAQ 4,703.61 +59.2980 1.28%

    Brokerage Partners

    Rates from Bankrate.com

    • Mortgage
    • Credit Cards
    • Auto

    Free Newsletters from TheStreet

    My Subscriptions:

    After the Bell

    Before the Bell

    Booyah! Newsletter

    Midday Bell

    TheStreet Top 10 Stories

    Winners & Losers

    Register for Newsletters
    Top Rated Stocks Top Rated Funds Top Rated ETFs