This Day On The Street
Continue to site
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

5 Earnings Short-Squeeze Plays

Z Chart Z data by YCharts


One potential earnings short-squeeze play is real estate information market place Zillow (Z), which is set to release numbers on Tuesday after the market close. This company provides information about homes, real estate listings and mortgages, through its Web site and mobile applications, enabling consumers connect with real estate and mortgage professionals. Wall Street analysts, on average, expect Zillow to report revenues of $27.14 million on earnings of 4 cents per share.

This company has beaten Wall Street estimates for the past three quarters in a row. During the last quarter, this company reported a profit of $1.7 million, or 6 cents per share, vs. a loss of $826,000, or 4 cents per share, from the same period a year ago. Revenue jumped more than twofold to $22.8 million from $11.3 million.

The current short interest as a percentage of the float for Zillow is extremely high at 44.7%. That means that out of the 12.55 million shares in the tradable float, 5.78 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.6%, or by about 306,000 shares. If the bears are caught learning too hard into a solid quarter, then this stock could explode higher as the shorts race to cover some of their positions.

From a technical perspective, Z is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock recently hit some resistance and formed a double top at around $44.23 to 44.00 a share. After confirming that topping pattern, the stock traded down to a recent low of $35.57 a share. Following that move, shares of Z have now moved back above its 50-day moving average of $37.37 a share with above average volume.

If you're bullish on Z, then I would wait until after they report and look for long-biased trades if this stock can manage to break out above some near-term overhead resistance at $42 to $44.23 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 634,639 shares. If we get that move, then Z should hit $50 or higher post-earnings.

I would avoid Z 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 $37.37 a share, and below some near-term support at $35.57 a share with heavy volume. If we get that move, then look for Z to re-test and possibly take out its 200-day moving average of $32.23 a share post-earnings.
4 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
CLNE $2.78 -2.11%
CREE $23.57 -3.08%
INFI $5.64 -3.92%
Z $25.06 -0.12%
VSI $27.51 -3.10%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs