I would avoid JOY 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 levels at $54.48 to $53.67 a share with heavy volume. If we get that move, then JOY will set up to re-test or possibly take out its next major support levels at $50.60 to $49.34 a share.
My final earnings short-squeeze trade idea is Avanir Pharmaceuticals (AVNR), which is set to release numbers on Wednesday after the market close. This company is focused on acquiring, developing and commercializing novel therapeutic products for the treatment of central nervous system disorders. Wall Street analysts, on average, expect Avanir Pharmaceuticals to report revenue of $12.90 million on a loss of 9 cents per share.
The current short interest as a percentage of the float for Avanir Pharmaceuticals is very high at 16.3%. That means that out of the 134.78 million shares in the tradable float, 21.33 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.6%, or by about 1.13 million shares. If the bears are caught leaning too hard into the quarter, then we could easily see an explosive short-squeeze develop post-earnings.From a technical perspective, AVNR is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly for the last three months, with shares falling from a high of $3.94 to a recent low of $2.07 a share. During that downtrend, shares of AVNR were consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of AVNR have recently started to rebound of that $2.07 low and move within range of triggering a near-term breakout trade post-earnings. If you're in the bull camp on AVNR, then I would wait until after its report and look for long-biased trades once it breaks out above some near-term overhead resistance levels at $2.85 to $2.92 a share and then above $3.06 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1,170,160 shares. If that breakout triggers, then AVNR will set up to re-test or possibly take out its next major overhead resistance levels at $3.26 to $.57 a share. Any high-volume move $3.57 will then put $3.94 into focus for shares of AVNR.