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Another earnings short-squeeze idea in the apparel and accessories sector is
Phillips-Van Heusen(PVH - Get Report), which is set to report results on Tuesday after the market close. This company designs and markets branded dress shirts, neckwear, sportswear, footwear, and other related products worldwide. Wall Street analysts, on average, expect PVH to report revenue of $1.50 billion on earnings of $1.09 per share.
On Monday, Brean Murray raised its price target on Phillips-Van Heusen to $105 from $85 ahead off its fourth-quarter earnings report. The firm said the company's dominant worldwide brands as well as domestic positions will continue to drive market share gains and higher multiples. That bump for Murray pushed shares of Phillips-Van Heusen to a new 52-week high of $92.13 on above average volume.
The current short interest as a percentage of the float for PVH sits at 3.3%. That means that out of the 64.88 million shares in the tradable float, 2.15 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.2%, or by about 45,000 shares. This isn't a huge short interest, but it's more than enough to spark some short-covering if PVH reports a strong quarter and issues bullish guidance.
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From a technical perspective, PVH is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending very strong for the past six months, rising from its October low of $53.51 to its current price of around $91 a share. During that uptrend, the stock has consistently made higher lows and higher highs, which is bullish price action.
If you're bullish on PVH, I would look for long-biased trades after its earnings report if the stock takes out its 52-week high or its daily high on Tuesday (whichever is greater) with high volume. Look for upside volume that's near or well above its three-month average action of 742,270 shares. If we get that action, then look for PVH to make a run at $100 or higher post-earnings.
I would simply avoid PVH or look for short biased trades if after earnings this stock fails to make a new 52-week high and then drops below some near-term support at $87.50 with high volume. If we get that action, I would look for PVH to drop down towards its 50-day moving average of $82.34 a share or possibly into the high-$70s if the bears pressure this lower post-earnings.