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Another earnings short-squeeze candidate is
Best Buy(BBY - Get Report), which is set to release numbers on Thursday before the market opens. This company is a multinational retailer of consumer electronics, home office products, entertainment products, appliances and related services. Wall Street analysts, on average, expect Best Buy to report revenue of $17.22 billion on earnings of $2.16 per share.
During the last quarter, Best Buy missed Wall Street estimates by 4 cents after reporting a profit of 47 cents per share. The company also missed Wall Street estimates for its second quarter earnings report. On a positive note, Best Buy could produce its third-straight quarter of revenue increased on the top line. This stock is up over 15% in 2012 as we move closer to its earnings report.
The current short interest as a percentage of the float for Best Buy is very high at 17.1%. That means that out of the 279.59 million shares in the tradable float, 47.84 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 6.8%, or by about 3.05 million shares.
From a technical perspective, BBY is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has seen buying interest during the last few months at around $22.30 to $23.40 a share. On the flipside, shares of BBY have run into selling resistance at around $28.22 to $28 a share.
If you're bullish on BBY, I would wait until after it reports earnings and only look for long-biased trades if it breaks out above some overhead resistance at $28.33 to $29.50 a share with high-volume. Look for volume on that move that's near or well above its three-month average volume of 5.5 million shares. If we get that action, I would look for BBY to make a run at its 52-week high of $32.85 if the bulls push this higher post-earnings.
I would simply avoid BBY or look for short-biased trades if it fails to break out post-earnings above some near-term overhead resistance at $28 a share, and then sells off with heavy volume through its 200-day moving average of $25.94 and 50-day of $25.24. If we get that action, look for BBY to drop back towards $23 to $22 a share if the bears drill this stock.
Best Buy, one of the
Greenlight Capital's holdings, shows up on a recent list of
3 Shorted Stocks Too Cheap to Sell.