Life Time Fitness
My final earnings short-squeeze play today is sporting activities player Life Time Fitness (LTM), which is set to release numbers on Thursday before the market open. This company operates multi-use sports and athletic, professional fitness, family recreation and spa centers in a resort-like environment. Wall Street analysts, on average, expect Life Time Fitness to report revenue of $286.68 million on earnings of 72 cents per share.
Last Tuesday, Stifel Nicolaus initiated coverage on Life Time Fitness with a hold rating on the stock. During the last three months, this stock has been trending lower with shares off by around 9%. The current short interest as a percentage of the float for Life Time Fitness is very high at 15.7%. That means that out of the 37.92 million shares in the tradable float, 6.18 million are sold short by the bears.From a technical perspective, LTM is currently trading right above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been downtrending big-time for the last four months, with LTM plunging from its March high of $52.68 to a low of $40.40 a share. During that downtrend, LTM has been consistently making lower highs and lower lows, which is bearish technical price action. That said, the stock has started to rebound strong off that $40.40 low with the stock hitting a recent high of $48.09 a share, and with it current trading at $44 a share. If you're bullish on LTM, then I would wait until after they report earnings and look for long-biased trades if this stock clears and maintains a trend back above its 200-day moving average of $45.18 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 493,662 shares. If we get that action, then I would look for LTM to re-test and possibly take out its next major overhead resistance levels at $48.06 to $49.88 a share if the bulls gain full control of this stock post-earnings. I would simply avoid LTM or look for short-biased trades if this stock fails to move back above its 200-day, and then if it fails to hold above its 50-day moving average of $44 a share. If it breaks below the 50-day before the report, then use $42.95 as the key support zone to trigger short-biased trades. If we get that action, then look for LTM to take out its next major support zones at $40.40 to $39.04 a share once the bears smash this stock lower 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.
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