This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Stocks Poised to Pop on Positive Earnings

Stocks in this article: OVTI RLD SAI VRA ASNA

Vera Bradley

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One earnings short-squeeze trade idea in the apparel and accessories complex is Vera Bradley (VRA), which is set to release numbers on Thursday after the market close. This company is a designer, producer, marketer, and retailer of functional accessories for women. Wall Street analysts, on average, expect Vera Bradley to report revenue of $116.83 million on earnings of 29 cents per share.

If you're looking for a heavily-shorted beaten-down stock ahead of its earnings report this week, then make sure to check out shares of Vera Bradley. This stock has plunged 33% in the last six months, and shares are currently trading just a few points above its 52-week low of $21.29 a share.

That severe beat-down inspired Baird to release some notes on the stock Tuesday, saying that Vera Bradley remains an under-appreciated retail growth story and anticipating first-quarter results to be a positive catalyst. The firm remains positive on the company's growth prospects, attractive category position, and potential for multiple expansion.

The current short interest as a percentage of the float for Vera Bradley is extremely high at 47.9%. That means that out of the 14.48 million shares in the tradable float, 9.62 million are sold short by the bears. This stock could easily experience a monster short-squeeze post-earnings, since it's so heavily-shorted and the float is so extremely small. All the bulls will need is a solid number and bullish guidance to spark a big-time short-covering rally.

From a technical perspective, VRA is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been destroyed by the bears in the last three months, with shares downtrending hard from a high of $39.48 to a recent low of $21.29 a share. During that sharp move lower, shares of VRA have consistently made lower highs and lower lows, which is bearish technical price action. That said, the stock has bounced recently from $21.29 to $25.04 a share off oversold conditions, since its relative strength index reading was under 30 before that bounce.

If you're bullish on VRA, I would look for long-biased trades after they report if this stock manages to break out above some near-term overhead resistance at $25.04 to $27.93 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 966,653 shares. If we get that action, then VRA will be solidly back above its 50-day moving average of $27.07 a share, and the stock will have a great chance of hitting $30 or higher post-earnings.

I would simply avoid VRA or look for short-biased trades if the stock fails to trigger that move, and then drops below some near-term support at $22 to $21.29 a share with high volume. If we get that action, then look for VRA to easily drop below $20 a share and trend significantly lower if the bears pressure the stock down post-earnings.

5 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs