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Another earnings short-squeeze trade in retail complex is
Pacific Sunwear of California(PSUN - Get Report), which is set to release numbers on Tuesday after the market open. This is a specialty retailer rooted in the action sports, fashion and music influences of the California lifestyle. Wall Street analysts, on average, expect Pacific Sunwear of California to report revenue of $245.37 million on a loss of 22 cents per share.
If you're looking for a penny stock that's uptrending heading into its earnings report, then make sure to take a hard look at shares of Pacific Sunwear of California. This stock has rallied big off its October low of $1.11 to its current price of around $2.23 a share. That move now puts the stock within range of breaking out post-earnings.
The current short interest as a percentage of the float for Pacific Sunwear of California is rather high at 12.7%. That means that out of the 36.45 million shares in the tradable float, 5.82 million are sold short by the bears. The bears have also been increasing their short positions from the last reporting period by 5.3%, or by about 291,000 shares.
From a technical perspective, PSUN is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the past few months, with shares mostly making higher lows and higher highs, which is bullish price action.
If you're bullish on PSUN, I would look for long-biased trades after its report if the stock manages to break out above some near-term overhead resistance at $2.28 to $2.43 a share with high-volume. Look for volume that's tracking in close to or above its three-month average volume of 497,475 shares. If we get that action, I would target a run back towards its next significant overhead resistance level at around $3 to $3.16 a share or possibly higher.
I would simply avoid long-biased trades in PSUN after earnings if this stock fails to break out above $2.28 to $2.43 a share with volume.
I also featured Pacific Sunwear in "
5 Stocks Under $5 Making Big Moves."