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5 Heavy Shorts To Consider

Stocks in this article: TFM BV PVH AEO EXPR

If you're in the bull camp on BV, 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 $11.04 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 572,592 shares. If that breakout triggers, then look for BV to spike substantially higher back towards its 50-day moving average of $13.38 a share or much higher.

I would simply avoid BV or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key support levels at $10.31 to $9.86 a share with heavy volume. If we get that action, then TFM will set up to enter new 52-week low territory, which is bearish technical price action. Some possible downside targets are $9 to $8 a share or lower.

PVH

One potential earnings short-squeeze candidate is PVH (PVH), which is set to release numbers on Tuesday after the market close. This is an apparel company, which designs and markets branded dress shirts, neckwear, sportswear and, to a lesser extent, footwear and other related products. Wall Street analysts, on average, expect PVH to report revenue of $1.64 billion on earnings of $2.30 per share.

The current short interest as a percentage of the float for PVH sits at 1.6%. That means that out of the 66.88 million shares in the tradable float, 1.10 shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.8%, or by 60,000 shares. If the bears are caught pressing their bets into this quarter, then we could easily see a decent short-squeeze develop post-earnings.

From a technical perspective, PVH is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently gapped up big from around $90 to $115.82 a share on heavy upside volume. Since that move, shares of PVH have started to trend sideways between $106 and $115 a share. A move outside of that sideways trading pattern post-earnings will likely set up the next major trend for shares of PVH. If you're bullish on PVH, 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 levels at $115 to $115.82 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 944,148 shares. If that breakout triggers, then PVH will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that move are $120 to $130 a share or higher.

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