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Another potential earnings short-squeeze trade is regional banking player
Bank of the Ozarks(OZRK - Get Report), which is set to release its numbers on Thursday after the market close. This firm operates as a bank holding company for Bank of the Ozarks that provides various retail and commercial banking services. Wall Street analysts, on average, expect Bank of the Ozarks to report revenue of $59.80 million on earnings of 52 cents per share.
This company has met or beat Wall Street estimates in the last four quarters. During the last quarter, Bank of the Ozarks reported earnings per share of 52 cents, topping Wall Street estimates of 51 cents per share. As we move closer to this bank's earnings report, the stock is trending just two points off its
52-week high of $32.26 a share.
>>3 Regional Bank Value Plays From UBS
The current short interest as a percentage of the float for Bank of the Ozarks is rather high at 12.4%. That means that out of the 29.30 million shares in the tradable float, 3.65 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.5%, or by about 87,000 shares. If the bears are caught pressing too hard into this quarter, then we could easily see a big short-squeeze develop post-earnings.
From a technical perspective, OZRK is currently trading above both its 50-day and 200-day
moving averages, which is bullish. This stock sold off from its April high of $32.13 to a recent low of $27.83 a share. After tagging that low, shares of OZRK have reversed its downtrend have now started to uptrend with the stock trading at around $30 a share. That move has now pushed OZRK within range of triggering a near-term breakout trade.
If you're bullish on OZRK, then I would wait until after they report numbers and look for long-biased trades if this stock can manage to trigger a break out trade above some overheard resistance at $31.07 and then $32.13 a share with
high volume. Look for volume on that move that hits near or above its three-month average action of 189,490 shares. If we get that move, then OZRK will enter new 52-week-high territory and the stock could possibly hit $35 a share or higher.
I would simply avoid OZRK or look for short-biased trades if after earnings this stock fails
to trigger that breakout and then takes out its 50-day moving average of $29.56 a share with high-volume. If we get that move, then OZRK will likely re-test and possibly take out its 200-day moving average of $28.36 a share if the bears hammer this stock down post-earnings.
Bank of the Ozarks shows up on a recent list of
20 Smaller Stocks With Growing Dividends.