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4 Stocks Set to Soar on Bullish Earnings

Marriott International

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My final earnings short-squeeze trade idea is Marriott International (MAR), which is set to release numbers on Wednesday after the market close. This a diversified hospitality company has more than 3,700 properties in 73 countries and territories. Wall Street analysts, on average, expect Marriott International to report revenue of $2.65 billion on earnings of 40 cents per share.

This stock has been uptrending very strong in 2012, with shares up around 35%. This bullish price action has shares of Marriott International trending just three points off its 52-week high of $41.84 a share ahead of its report.

The current short interest as a percentage of the float for Marriott International is rather high at 7.5%. That means that out of the 242.86 million shares in the tradable float, 18.49 million shares are sold short by the bears.

From a technical perspective, MAR is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months, with shares soaring from a low of $34.69 to its recent high of $41.84 a share. During that uptrend, shares of MAR were consistently making higher lows and higher highs, which is bullish technical price action. Shares of MAR have cooled off a big recently from that $41.84 high to its current price of around $39.50 a share.

If you're in the bull camp on MAR, then I would wait until after its earnings report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $40.50 to $41.84 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 2.9 million shares. If we get that breakout, then MAR will have a great chance of tagging $45 a share or possibly much higher. Keep in mind that any move over $41.84 will push MAR into new 52-week-high territory, which is bullish technical price action.

I would simply avoid MAR or look for short-biased trades if after earnings it fails to trigger that breakout, and then moves back below some near-term support at $38.76 to $38.07 a share with high volume. If we get that move, then MAR will setup to re-test or possibly take out its 200-day moving average of $36.80 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.

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Stock quotes in this article: AYI, FDO, OCZ, MAR 
At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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