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My first earnings short-squeeze trade idea is apparel player
G-III Apparel Group(GIII - Get Report), which is set to release its numbers on Thursday before the market open. This company designs, manufactures and markets a range of outerwear, women's sportswear and dresses, including coats, jackets, pants, women's suits and women's performance wear. Wall Street analysts, on average, expect G-III Apparel Group to report revenue of $310.78 million on earnings of 29 cents share.
On Tuesday, Stifel Nicolaus raised its price target from $27 to $31 on G-III Apparel Group ahead of its fourth quarter earnings report. Nicolaus expects the fourth quarter to be challenging but thinks investors will be focused on G-III's 2013 outlook.
The current short interest as a percentage of the float for G-III Apparel Group is rather high at 13.2%. That means that out of the 14.34 million shares in the tradable float, 2.09 million shares are sold short by the bears.
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technical perspective, GIII is currently trading above both its 50-day and 200-day
moving averages, which is bullish. This stock just recently started to move back above its 200-day moving average of $26.20 on decent volume. That move now puts the stock within range of triggering a near-term breakout trade post-earnings.
If you're bullish on GIII, I would wait until after its report and look for long-biased trades if this stock breaks out above some near-term overhead resistance at $27.41 a share with high volume. Look for volume that's near or well above its three-month average action of 169,236 shares. If we get that action, then this stock could make a run at its next significant overhead resistance level at $29.75 or possibly higher if the bulls gain full control of GIII post-earnings.
I would simply avoid GIII or look for short-biased trades if after earnings this stock fails to break out above $27.41, and then drops below $25.44 to $24.58 (its 50-day) with volume. Target a drop back toward $23.48 or possibly even down to $21 if the bears hammer this stock lower post-earnings.