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
TheStreet Open House

5 Stocks Set to Soar off Bullish Earnings

Stocks in this article: JBLTIFKKDATUMLHR

Krispy Kreme Doughnuts

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

An earnings short-squeeze trade idea in the retail grocery sector is Krispy Kreme Doughnuts (KKD), which is set to report results on Tuesday after the market close. This company is a retailer and wholesaler of doughnuts and packaged sweets. Wall Street analysts, on average, expect Krispy Kreme to report revenue of $101.29 million on earnings of 6 cents per share.

Krispy Kreme Doughnuts' revenue has trended higher in each of the last four quarters. Revenue jumped 11.4% in the second quarter from the year earlier, rising 13.6% in the first quarter from last year and 5.7% in the fourth quarter vs. the year-ago period.

The current short interest as a percentage of the float for Krispy Kreme Doughnuts stands at 5.8%. That means that out of the 50.91 million shares in the tradable float, 2.97 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 17.9%, or by about 450,000 shares.

>>5 Stocks Insiders Love Right Now

From a technical perspective, KKD is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock recently found some buying interest right around its 200-day moving average of $7.77. Since buyers stepped in at that level, the stock has risen to its current price of around $8.30. That move has pushed KKD within range of triggering a big breakout post-earnings.

If you're bullish on KKD, I would look for long-biased trades after its earnings report if the stock manages to break out above some near-term overhead resistance at $8.55 to $8.77 a share with high volume. Look for upside volume that's near or well above its three-month average action of 498,652 shares. If we get that action, then look for KKD to make a run at $9.50 to $10 a share or possibly much higher if the bulls spark a short covering rally post-earnings.

I would simply avoid KKD or look for short-biased trades if after earnings this stock fails to break out over $8.55 to $8.77 a share, and then drops back below its 200-day moving average of $7.77 with volume. If we get that action, I would look for a drop back toward $7 to $6.80 a share or possibly lower if the bears slam this stock down post-earnings.

4 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!
DOW 17,195.42 +221.11 1.30%
S&P 500 0.00 -2.75 -0.14%
NASDAQ 4,566.1380 +16.9120 0.37%

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