With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.
My first earnings short-squeeze play is Fresh Market (TFM), which is set to release numbers on Wednesday before the market open. This is a specialty retailer focused on creating an extraordinary food shopping experience for its customers. It offers fresh, carefully selected, high-quality food products focused on perishable categories. Wall Street analysts, on average, expect Fresh Market to report revenue of $318.60 million on earnings of 26 cents per share.This company is hoping to beat Wall Street estimates for the third quarter in a row. During the last quarter, it beat Wall Street estimates after reporting a profit of 28 cents per share versus the mean estimate of 27 cents per share. During the prior quarter, Fresh Market reported a net income of 40 cents per share. This company is also looking to maintain its trend of double-digit revenue growth for the fifth straight quarter in a row. Fresh Market has averaged year-over-year growth of 17.3% over the last four quarters. The current short interest as a percentage of the float for Fresh Market is pretty high at 9.9%. That means that out of the 40.32 million shares in the tradable float, 3.71 million 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 just over 165,000 shares. If the bears are caught leaning too hard into this quarter, then we could easily see a large short-squeeze develop post-earnings. From a technical perspective, TFM is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last month and change, with shares moving higher from $55.34 to $62.48 a share. During that uptrend, shares of TFM have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed TFM within range of triggering a near-term breakout trade post-earnings. If you're bullish on TFM, then I would wait until after its report and look for long-biased trades once this stock manages to break out above some near-term overhead resistance at $62.48 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 440,760 shares. If that breakout triggers, then CRM will set up to re-test or possibly take out its next major overhead resistance level at $65.69 a share. Any move above $65.69 would then push TFM into new 52-week high territory, which is bullish technical price action.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV