Another potential earnings short-squeeze trade is motor homes manufacturer Winnebago Industries (WGO - Get Report), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Winnebago Industries to report revenue of $160.03 million on earnings of 17 cents per share.
This stock has been uptrending extremely strong so far in 2012, with shares up a whopping 69%. Shares of Winnebago Industries are now trading within just one point of its 52-week high of $13.23 ahead of its report. The current short interest as a percentage of the float for Winnebago Industries is notable at 6.6%. That means that out of the 28.98 million shares in the tradable float, 1.90 million shares are sold short by the bears.From a technical perspective, WGO is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been on fire during the last six months, with shares trading from a low of $8.30 to its recent high of $13.23 a share. During that sharp move higher, shares of WGO have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed WGO within range of triggering a near-term breakout trade post-earnings. If you're bullish on WGO, then I would wait until after its report and look for long-biased trades if this stock can manage to break out above some near-term overhead resistance levels at $13 to $13.23 a share with high volume. Look for volume on that move that tracks in at near or above its three-month average action of 219,297 shares. If WGO triggers that breakout, then this stock will setup to re-test or possibly take out its next significant overhead resistance levels at $16 to $16.60 a share. I would avoid WGO or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day at $11.60 a share with high volume. If we get that action, then WGO will setup to re-test and possibly take out its next major support levels at $10.56 to its 200-day at $9.89 a share.
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