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My first earnings short-squeeze play today is specialty retailer player
DSW(DSW - Get Report), which is set to release its numbers on Tuesday before the market open. This company, together with its subsidiaries, operates as a branded footwear and accessories specialty retailer in the U.S. Wall Street analysts, on average, expect DSW to report revenue of $548.09 million on earnings of 90 cents per share.
During the last quarter, DSW beat Wall Street estimates by 2 cents, coming in at a profit of 51 cents a share vs. the estimate of 49 cents per share. That registered the fourth straight quarter of beating Wall Street estimates.
The current short interest as a percentage of the float for DSW is notable at 5.1%. That means that out of the 29.20 million shares in the tradable float, 1.64 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8.5%, or by about 128,600 shares.
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technical perspective, DSW is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock sold off hard from its February high of $42.94 to its recent low of $32.45 a share. During the last three months, this stock has been trending sideways between $51.84 on the downside and $58.65 on the upside. A move outside of that range post-earnings will likely set this stock up for its next major trend.
If you're bullish on DSW, I would wait until after its report and look for long-biased trades if this stock can manage to move back above its 50-day
moving average of $55.42 share with high-volume. Look for volume on that move that registers near or above its three-month average action of 472,787 shares. If we get that action, then I would add to any DSW long positions once it takes out its 52-week high of $58.65 a share with high-volume.
I would simply avoid DSW or look for short-biased trades if after earnings this stock fails to trade back above its 50-day moving average at $55.42, and then drops back below some near-term support at $53.83 to $51.84 a share with heavy volume. If we get that action, look for DSW to re-test its 200-day moving average of $49.41 a share, or possibly trend even lower towards some previous support at $45.50 a share.