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Another earnings short-squeeze play is
Schiff Nutrition(SHF), which is set to release numbers on Tuesday before the market open. This company develops, manufactures, markets and distributes branded and private-label vitamins, nutritional supplements and nutrition bars in the U.S. and internationally. Wall Street analysts, on average, expect Schiff Nutrition to report revenue of $83.60 million on earnings of 20 cents per share.
This stock has been trending extremely bullish so far 2012, with shares up around 100%. As we approach its earnings report, this stock is trading just 30 cents off its 52-week high of $20.69 a share.
The current short interest as a percentage of the float for Schiff Nutrition stands at 5.8%. That means that out of the 12.48 million shares in the tradable float, 768,145 shares are sold short by the bears. This is a decent short interest on a stock with a very low tradable float. Any bullish earnings news could easily spark a big short-squeeze post-earnings.
From a technical perspective, SHF is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the past six months, with shares soaring from a low of $11.85 to its recent high of $20.69 a share. During that uptrend, shares of SHF have consistently made higher lows and higher highs, which is bullish technical price action. That move has now pushed SHF within range of triggering a major breakout trade.
If you're bullish on SHF, then I would wait until after they report earnings and look for long-biased trades if this stock can manage to clear some near-term overhead resistance levels at $20.69 to $20.65 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 44,039 shares. If we get that breakout, then look for SHF to head north of $25 a share post-earnings.
I would avoid SHF 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 $19.02 a share with heavy volume. If we get that action, then look for SHF to re-test or possibly take out its next major support levels at $18.69 to $16.47 a share post-earnings.