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TheStreet Open House

5 Earnings Short-Squeeze Plays to Consider

Stock quotes in this article: CRM, BAMM, TLYS, GLOG, DE

The current short interest as a percentage of the float for the GasLog sits at 3.4%. That means that out of the 23.46 million shares in the tradable float, 759,000 shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to spark a tradable short-covering rally if GasLog delivers the earnings news the bulls are looking for.

From a technical perspective, GLOG is currently trending below its 50-day moving average, which is bearish. This stock has been downtrending a bit for the last two months, with shares falling from a high of $12.29 to its recent low of $10.35 a share. During that downtrend, shares of GLOG have been consistently making lower highs and lower lows, which is bearish technical price action. That said, GLOG has now started to rebound off that recent low and move within range of triggering a near-term breakout trade.

If you're bullish on GLOG, 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 $11.23 to $11.84 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 126,306 shares. If that breakout triggers soon, then GLOG will set up to re-test or possibly take out its next major overhead resistance level at $12.29 a share. Any high-volume move above $12.29 will then put $13.50 to $14 into focus for GLOG.

I would avoid GLOG or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support at $10.35 a share with heavy volume. If we get that action, then GLOG will set up to re-test or possibly take out its next major support levels at $9.75 to $9.50 a share.

Deere & Co

My final earnings short-squeeze play is Deere & Co. (DE), which is set to release numbers on Wednesday before the market open. This company operates in three major business segments: agriculture/turf, construction/forestry and financial services. Wall Street analysts, on average, expect Deere & Co. to report revenue of $8.85 billion on earnings of $1.88 per share.

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