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Another potential earnings short-squeeze play in the retail apparel sector is
Jos. A. Bank Clothiers(JOSB), which is set to release numbers on Thursday before the market open. This is a designer, manufacturer, retailer and direct marketer of men's tailored and casual clothing and accessories and is a retailer of tuxedo rental products. Wall Street analysts, on average, expect Jos. A. Bank Clothiers to report revenue of $352.75 million on earnings of $1.58 per share.
If you're looking for uptrending heavily-shorted stock, that's within range of some major breakout levels heading into its earnings report, then take a good look at shares of Jos. A. Bank Clothiers. This stock is up over 10% so far in 2012, and it's currently trading within range of its 52-week high of $57.14.
The current short interest as a percentage of the float for Jos. A. Bank Clothiers is pretty high at 14.6%. That means that out of the 27.49 million shares in the tradable float, 4.02 million are sold short by the bears. This is a high-short-interest and low-float situation, so any bullish earnings news could easily set off a big short squeeze.
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From a technical perspective, JOSB is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong since January, with shares consistently making higher lows and higher highs, which is bullish price action. That strong move higher has now pushed JOSB within range of making new 52-week highs off a strong earnings report and bullish forward guidance.
If you're bullish on JOSB, I would wait until after they report earnings and look for long biased trades if the stock breaks out above $55 to $57.14 a share with heavy volume. Look for volume on that move that registers close to or above its three-month average volume of 294,844 shares. If we get that move, then look for JOSB to trade up towards $60 to $65 a share if the bulls force the bears to cover some of those short bets.
I would avoid JOSB or look for short-biased trades if the stock fails to trigger that breakout after earnings and then drops below some near-term support at $52.50 a share with high volume. Target a drop back towards its 50-day moving average of $50.99 a share, or possibly lower if the bears sell this stock off hard post-earnings.