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Another earnings short-squeeze play in the trucking complex is
J.B. Hunt Transport Services(JBHT - Get Report), which is set to release numbers on Thursday after the market close. This company operates as a surface transportation and delivery services to a diverse group of customers and consumers throughout the continental U.S., Canada and Mexico. Wall Street analysts, on average, expect J.B. Hunt Transport Services to report revenue of $1.28 billion on earnings of 67 cents per share.
This stock has been trending modestly strong so far in 2012, with shares up around 22%. Shares of JBHT are now trading about seven points off its 52-week high of $61.18 ahead of its report.
The current short interest as a percentage of the float for J.B. Hunt Transport Services sits at 4.9%. That means that out of the 90.60 million shares in the tradable float, 4.39 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 10%, or by about 133,000 shares. If the bears are caught pressing their bets into the quarter, then we could see JBHT spike significant higher post-earnings.
From a technical perspective, JBHT is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock recently bounced off a low of $50.56 a share, and trended higher back above both its 50-day and 200-day moving averages. That move has now pushed JBHT within range of triggering a near-term breakout trade post-earnings.
If you're bullish on JBHT, 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 $56.09 to $56.36 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.1 million shares. If JBHT can trigger that move, then look for this stock to re-test or possibly take out its next major overhead resistance levels at $60.04 to $61.02 a share.
I would avoid JBHT or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day at 53.43 and its 200-day at $53.41 a share with heavy volume. If we get that action, then JBHT will setup to re-test or possibly take out its next major support levels at $52 to $50.56 a share.
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.