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5 Earnings Short-Squeeze Plays to Consider

Books-A-Million

Another potential earnings short-squeeze play is Books-A-Million (BAMM), which is set to release its numbers on Tuesday after the market close. This company is engaged in the sale of books, magazines and related items through a chain of retail bookstores. There are currently no Wall Street estimates available for Books-A-Million.

The current short interest as a percentage of the float for Books-A-Million is extremely high at 20.4%. That means that out of the 10.13 million shares in the tradable float, 1.16 million shares are sold short by the bears. This stock has a very low float and a high short interest. Any bullish earnings news could easily spark a monster short-squeeze for BAMM post-earnings.

From a technical perspective, BAMM is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last month, with shares dropping from $2.95 to its recent low of $2.30 a share. During that downtrend, shares of BAMM have mostly been making lower highs and lower lows, which is bearish technical price action.

If you're in the bull camp on BAMM, then I would wait until after its report and look for long-biased trades once it manages to break out above some near-term overhead resistance at $2.50 with high volume. Look for volume on that move that registers near or above its three-month average action of 17,425 shares. If we get that breakout, then BAMM will set up to re-test or possibly take its 50-day at $2.71 and its 200-day at $2.82 a share. Any high-volume move above those key moving averages will then put $2.95 to $3.20 into focus for shares of BAMM.

Tilly's

One potential earnings short-squeeze trade is Tilly's (TLYS), which is set to release numbers on Tuesday after the market close. This company is a specialty retailer of West Coast inspired apparel, footwear and accessories. Wall Street analysts, on average, expect Tilly's to report revenue of $128.66 million on earnings of 30 cents per share.

The current short interest as a percentage of the float for Tilly's stands at 3.9%. That means that out of the 17.94 million shares in the tradable float, 357,000 shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4.7%, or by about 16,000 shares. If the bears are caught pressing their bets into this quarter, then we could easily see a decent short-squeeze develop post-earnings.

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