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My first earnings short-squeeze play is specialty retail player
Finish Line(FINL - Get Report), which is set to report results on Thursday before the market open. This company operates as a mall-based specialty retailer in the U.S. It operates Finish Line stores that offer performance and athletic casual footwear, apparel and accessories for men, women and kids. Wall Street analysts, on average, expect Finish Line to report revenue of $320.73 million on earnings of 23 cents per share.
This company has met or exceeded Wall Street earnings per share estimates over the last four quarters. The current short interest as a percentage of the float for Finish Line is rather high at 10.2%. That means that out of the 50.50 million shares in the tradable float, 5.14 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low float. If Finish Line can deliver what the bulls are looking for, then this stock could see a large short-squeeze post-earnings.
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technical perspective, FINL is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending hard since late March, with shares dropping from a high of over $26.09 to a recent low of $17.87 a share. During that sharp move lower, shares of FINL have consistently made lower highs and lower lows, which is bearish technical price action. In fact, this stock is trading so poorly it's only trading about 2 points off its
52-week low of $16.42 a share as we approach their earnings report.
If you're bullish on FINL, then I would wait until after it reports earnings and look for long-biased trades if this stock can manage to
trigger a breakout above some near-term overhead resistance at $19.00 to $19.62 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 1.2 million shares. If we get that move, then FINL has a great chance of re-testing its May high of $22.76 a share post-earnings.
I would simply avoid FINL or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops below some major past support at $17.66 to $16.25 a share with high-volume. If we get that move, then FINL will be trading at a new 52-week low and it could easily hit $15 a share or lower.