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5 Stocks Set to Soar on Bullish Earnings

Pier 1 Imports

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My final earnings short-squeeze play today is specialty retailer Pier 1 Imports (PIR - Get Report), which is set to release numbers on Thursday before the market open. This company is a specialty retailer of decorative home furnishings and gifts. Wall Street analysts, on average, expect Pier 1 Imports to report revenue of $360.01 million on earnings of 16 cents per share.

Pier 1 Imports earnings have been in line with consensus estimates in recent quarters.

The current short interest as a percentage of the float for Pier 1 Imports is rather high at 8.3%. That means that out of the 92.97 million shares in the tradable float, 7.85 million are sold short by the bears. This is a decent short interest on a stock with a relatively low float. If Pier 1 Imports can manage to report solid number and bullish forward guidance, then the stock could easily see a sharp short-squeeze develop post-earnings.

>>10 Best-Performing Stocks in Three-Year Bull Market

From a technical perspective, PIR is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been downtrending for the past three months, with shares falling from a high of $19.05 to a recent low of $14.79 a share. During that downtrend, shares of PIR have consistently made lower highs and lower lows, which is bearish technical price action. That said, this stock recently found buying interest right off its 200-day moving average of $14.59 a share.

If you're in the bull camp on PIR, I would wait until after they report and look for long-biased trades if this stock takes out its 50-day moving average of $16.97 a share with high-volume. Look for volume on that move that's near or above its three-month average action of 1.9 million shares. If we get that move, then look to add to any long positions in PIR once it takes out some more resistance at $18.06 with heavy volume. Target a move towards $19.05 or higher post-earnings.

I would simply avoid PIR or look for short-biased trades if it fails to trigger that breakout, and then takes out its 200-day moving average at $14.59 with heavy volume. If we get that move, then I would target a drop toward $13 a share or lower for PIR post-earnings.

To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


Follow Stockpickr on Twitter and become a fan on Facebook.
At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.
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CASY $112.96 -0.40%
FNSR $16.14 -1.20%
FDS $148.61 -0.11%
KORS $51.77 -1.30%
PIR $6.46 1.40%


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