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My final earnings short-squeeze play is retail apparel player
Francesca's(FRAN - Get Report), which is set to release numbers on Tuesday after the market close. This company operates a chain of retail boutiques under the Francesca's collections brand in the U.S. Its retail boutiques offer apparel, jewelry, accessories and gifts to female customers. Wall Street analysts, on average, expect Francesca's to report revenue of $60.36 million on earnings of 17 cents per share.
Francesca's has been skyrocketing so far in 2012, with shares up over 108%. This stock is trending so strong, that as I write this FRAN has hit a new all-time high at $37.09 a share.
The current short interest as a percentage of the float for Francesca's is extremely high at 17.5%. That means that out of the 34.65 million shares in the tradable float, 5.96 million are sold short by the bears. Any bullish earnings news from FRAN could easily spark a solid short-covering rally post-earnings.
From a technical perspective, FRAN 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 last four months, with shares soaring from $20.93 to $37.09 a share. During that uptrend, shares of FRAN have been consistently making higher lows and higher highs, which is bullish technical price action.
If you're bullish on FRAN, then I would wait until after its report and look for long-biased trades if this stock manages to print a new all-time high with high volume. Look for volume on that move that registers near or above its three-month average action of 781,286 shares. If we get that action, then look for FRAN to trend north of $40 a share post-earnings.
I would simply avoid FRAN or look for short-biased trades after earnings if it fails to trigger that move, and then moves back below some near-term support at $34 to $33 a share with heavy volume. If we get that action, then FRAN will setup to re-test or possibly take out its 50-day moving average of $30.85 a share 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.