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
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

5 Stocks Poised to Pop on Bullish Earnings

Safeway

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Another potential earnings short-squeeze play is retail food and drug chain Safeway (SWY), which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Safeway to report revenue of $10.24 billion on earnings of 46 cents per share.

Goldman Sachs recently said that shares of Safeway continue to be at a trough and short interest remains at its highest. The firm thinks the muted results and low expectations may cause a short-squeeze.

>>5 Rocket Stocks to Buy in October

The current short interest as a percentage of the float for Safeway is extremely high at 30.9%. That means that out of the 237.92 million shares in the tradable float, 70.11 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.1%, or by about 3.53 million shares. If the shorts are caught pressing too hard into this quarter, then we could see a large short-squeeze develop post-earnings.

From a technical perspective, SWY is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been trending sideways for the past month and change, with shares moving between $15.50 on the downside and around $17 on the upside. A move outside of that trading range post-earnings will likely setup the next major trend for SWY.

If you're in the bull camp on SWY, then I would wait until after its report and look for long-biased trades if this stock can manage to break out above some past overhead resistance levels at $16.74 to $16.92 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 7 million shares. If SWY triggers that breakout, then this stock will have a great chance of re-testing or possibly taking out its next major overhead resistance levels at its 200-day at $18.61 and at $19.11 a share. This stock could even hit $22 to $23 if those levels get taken out with volume.

I would simply avoid SWY or look for short-biased trades if after earnings this stock fails to trigger that breakout and then drops back below some key near-term support at $15.86 to $15.50 a share with high volume. If we get that move, then SWY will setup to re-test or possibly take out its next major support levels at $14.74 to $14.58 a share post-earnings. Any move below $14.58 will push SWY into new 52-week-low territory, which would be bearish technical price action.

Stock quotes in this article: FAST, SWY, WGO, JBHT, OZRK 

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.
DOW 16,501.65 -12.72 -0.08%
S&P 500 1,875.39 -4.16 -0.22%
NASDAQ 4,126.9670 -34.4910 -0.83%

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