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
My final earnings short-squeeze trade idea today is chemical manufacturing player
Greenbrier (GBX - Get Report), which is set to release numbers on Thursday after the market close. This company engages in the design, manufacture and marketing of railroad freight car equipment in North America and Europe. Wall Street analysts, on average, expect Greenbrier to report revenue of $519.39 million on earnings of 60 cents per share.
If you're looking for a heavily-shorted beaten-down mid-cap stock heading into its earnings report this week, then make sure to check out shares of Greenbrier. This stock has been hammered by the bears so far in 2012 with shares off by over 38%.
The current short interest as a percentage of the float for Greenbrier is pretty high at 9.1%. That means that out of the 23.95 million shares in the tradable float, 2.19 million are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 20.5%, or by about 372,000 shares. Since this stock is so beaten-down heading into its report, we could see a large short-squeeze develop if the bears are caught pressing their luck here.
technical perspective, GBX is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock has been destroyed by the sellers over the last six months, with shares dropping from a high of $26.28 to a recent low of $13.10 a share. During that big-time selloff, shares of GBX have consistently made lower highs and lower lows, which is bearish technical price action. That said, the stock has started to change that trend a bit over the last month with shares making higher lows and setting up for higher highs.
If you're bullish on GBX, then I would wait until after its report and look for long-biased trades if it can manage to
trigger a breakout above some near-term overhead resistance at $16.33 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 599,228 shares. If we get that action, then GBX has a great chance of re-testing and possibly taking out its 200-day moving average of $19.35 a share.
I would simply avoid GBX or look for short-biased trades if it fails to trigger that breakout, and then moves back below some near-term support at $14.25 a share with heavy volume. If we get that move, then GBX could easily re-test and possibly take out its May low of $13.10 a share.
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.