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One earnings short-squeeze candidate in the specialty retail complex is
Cost Plus(CPWM), which is set to release numbers on Thursday after the market close. This company is a specialty retailer of casual home furnishings and entertaining products in the U.S. Wall Street analysts, on average, expect Cost Plus to report revenue of $361.81 million on earnings of $1.50 per share.
If you're looking for a small-cap stock that recently hit a new
52-week high as we approach its earnings report, then make sure to take a hard look at shares of Cost Plus. This stock has been on a tear during the last six months, rising from its October low of $5.57 to its current price of just over $15 a share.
The current short interest as a percentage of the float for Cost Plus is extremely rather high at 10.1%. That means that out of the 17.18 million shares in the tradable float, 1.94 million are sold short by the bears. This is a slow float and decent short interest situation, so any bullish earnings news could easily spark a huge short-squeeze for Cost Plus.
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From a technical perspective, CPWM 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 six months, with shares consistently making higher lows and higher highs, which is bullish price action. That uptrend has now pushed CPWM within range of triggering a big breakout trade post-earnings.
If you're bullish on CPWM, I would look for long-biased trades after it reports earnings if this stock manages to break out above some near-term overhead resistance at $15.69 to $15.82 a share with strong volume. Look for volume that registers near or above its three-month average volume of 263,313 shares. If we get that action, look for CPWM to march quickly towards $20 a share or higher if the bulls gain full control of this stock post-earnings.
I would avoid CPWM or look for short-biased trades if the stock fails to break out after earnings, and then drops below some near-term support at $14.55 a share with volume. Target a drop back towards some recent support levels at $12.50 to $12 a share if the bears whack this lower post-earnings.