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Another earnings short-squeeze trade is
Lindsay(LNN - Get Report), a designer and manufacturer of self-propelled center pivot and lateral move irrigation systems used in the agricultural industry, which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Lindsay to report revenue of $128.99 million on earnings of 76 cents per share.
This stock has been trending very strong so far in 2012, with shares up around 35%. Shares of LNN are now trading about two points off its 52-week high of $74.62 ahead of its report. The current short interest as a percentage of the float for Lindsay is rather high at 12.6%. That means that out of the 12.44 million shares in the tradable float, 1.57 million shares are sold short by the bears.
From a technical perspective, LNN 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 moving up from a low of $64.46 to its recent high of $74.02 a share. During that uptrend, shares of LNN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed LNN within range of triggering a major breakout trade post-earnings.
If you're bullish on LNN, 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 $74.02 to $74.50 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 154,157 shares. If LNN triggers that breakout, then look for this stock to re-test or possibly take out its next major overhead resistance level at $80 to $85.11 a share.
I would avoid LNN or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day at $70.41 a share with heavy volume. If we get that action, then LNN will setup to re-test or possibly take out its next major support levels at $67.42 to $64.46 a share post-earnings.