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
My final earnings short-squeeze play today is footwear and accessories designer
Crocs(CROX - Get Report), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Crocs to report revenue of $302.37 million on earnings of 43 cents per share.
This company has beaten Wall Street estimates the last four quarters and it is coming off a quarter where it smashed estimates by 5 cents per share, after reporting net income of 68 cents per share against a mean estimate of 63 cents per share. This company has averaged year-over-year revenue growth of 18.3% over the last four quarters. Crocs has also reported three consecutive quarters of income increases.
The current short interest as a percentage of the float for Crocs is notable at 6.1%. That means that out of the 89.19 million shares in the tradable float, 5.44 million shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a solid short-covering rally if the bulls get the news they're looking for.
From a technical perspective, CROX is currently trading below both its 50-day and 200-day moving averages, which is bearish. This stock ran into some tough resistance in September at around $18.60 a share, and since then it has downtrended to a low of $15.60 a share. During that downtrend, shares of CROX have been mostly making lower highs and lower lows, which is bearish technical price action. That said, the stock has stabilized around $15.60 and is now moving within range of triggering a near-term breakout trade.
If you're in the bull camp on CROX, 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 $16.92 to $18.60 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 1.7 million shares. If we get that move, then CROX will setup to re-test or possibly take out its next major overhead resistance levels at $20 to $22.59 a share post-earnings.
I would simply avoid CROX 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 $15.60 a share with high volume. If we get that move, then CROX will setup to re-test or possibly take out its next major support levels at $13.84 to $13.80 a share post-earnings. Any move below $13.80 will push CROX into new 52-week low territory, which is bearish technical price action.
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.