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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Earnings Short-Squeeze Plays

VSI ChartVSI data by YCharts

Vitamin Shoppe

My first earnings short-squeeze play is vitamin and supplement maker Vitamin Shoppe (VSI), which is set to report results on Tuesday before the market open. This company is a specialty retailer and direct marketer of vitamins, minerals, herbs, specialty supplements, sports nutrition and other health and wellness products. Wall Street analysts, on average, expect Vitamin Shoppe to report revenue of $242.15 million on earnings of 51 cents per share.

If you're looking for a strong trending stock heading into its earnings report this week, then make sure to check out shares of Vitamin Shoppe. This stock has been soaring so far in 2012 with shares up over 40%, and its currently trading just a few points off its 52-week high of $58.88 a share.

The current short interest as a percentage of the float for Vitamin Shoppe is notable at 8.5%. That means that out of the 26.22 million shares in the tradable float, 2.26 million shares are sold short by the bears. This is a decent amount of bears in a stock with a relatively low float. If the bulls get the news they're looking for, then this stock could easily see a massive short-squeeze post-earnings.

From a technical perspective, VSI is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending very strong for the past six months, with shares soaring from a low of $41.62 to a recent high of $58.88 a share. During that uptrend, shares of VSI have consistently made higher lows and higher highs, which is bullish technical price action. That move has now pushed VSI within range of triggering a near-term breakout trade.

If you're bullish on VSI, then I would wait until after earnings and look for long-biased trades if this stock can manage to trigger a break out above its all-time high of $58.88 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 458,895 shares. If we get that action, then VSI should easily trade north of $60 a share post-earnings.

I would simply avoid VSI or look for short-biased trades if after earnings it fails to trigger that breakout, and then moves back below its 50-day moving average of $53.51 a share with high volume. If we get that action, then VSI could possibly trade below $50 a share post-earnings.

2 of 6

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,908.15 -77.46 -0.46%
S&P 500 1,968.07 -4.76 -0.24%
NASDAQ 4,409.2420 -9.7920 -0.22%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs