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My first earnings short-squeeze play is online travel research player
TripAdvisor(TRIP - Get Report), which is set to report results on Tuesday after the market close. This company features reviews and advice on hotels, resorts, flights, vacation rentals, vacation packages and travel guides. Wall Street analysts, on average, expect Tripadvisor to report revenue of $202.78 million on earnings of 41 cents per share.
If you're looking for a strong-trending heavily shorted stock heading into its earnings report this week, then make sure to check out shares of Tripadvisor. This stock has been on an absolute tear so far in 2012 with shares up around 80%. Shares of Tripadvisor are so strong that it's trending just 2 points off its
52-week high of $47.81 as we approach its earnings report.
The current short interest as a percentage of the float for Tripadvisor stands at 9.6%. That means that out of the 92.52 million shares in the tradable float, 9.91 million shares are sold short by the bears. If Tripadvisor can manage to please the bulls with a strong report, then we could easily see a sizeable short squeeze develop post-earnings.
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technical perspective, TRIP is currently trading above both its 50-day and 200-day
moving averages, which is bullish. This stock has been uptrending extremely strong for the past six months, with shares soaring from a low of $26.93 to a recent high of $47.81 a share. During that uptrend, TRIP has been consistently making higher highs and higher lows, which is bullish price action. That move has now pushed TRIP within range of triggering a major breakout trade post-earnings.
If you're bullish on TRIP, then I would wait until after earnings and look for long-biased trades if this stock can manage to
trigger a breakout above some near-term overhead resistance at $47.81 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2.1 million shares. If we get that move, then TRIP will have an excellent chance of trading well north of $50 a share, since the stock will enter new all-time-high territory.
I would simply avoid TRIP or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops below its 50-day moving average of $43.93, and below some more support at $43.26 to $42.18 a share with high volume. If we get that action, then TRIP could easily trade down to $36 to $33 a share if the bears hammer this lower post-earnings.
TripAdvisor, one of
Blue Ridge Capital's holdings as of the most recently reported period, was one of the
10 Best-Performing S&L 500 Stocks in the Second Quartwer.