I would avoid PAY 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 $32.50 to $31.50 a share with heavy volume. If we get that move, then PAY will set up to re-test or possibly take out its 50-day at $30.71 a share. Any move below its 50-day will then put $29.55 to $28.60 a share into focus for shares of PAY.
My final earnings short-squeeze play is Quicksilver (ZQK - Get Report), which is set to release numbers on Thursday after the market close. This company designs, develops and distributes branded apparel, footwear, accessories and related products, catering to the casual, youth lifestyle associated with the sports of surfing, skateboarding and snowboarding. Wall Street analysts, on average, expect Quicksilver to report revenue of $562.99 million on earnings of 10 cents per share.
During the last quarter, this company beat Wall Street estimates by 3 cents, after reporting a profit of 9 cents per share versus Wall Street estimates of 6 cents per share. This followed two straight quarters where Quicksilver fell short of Wall Street estimates.The current short interest as a percentage of the float for Quicksilver sits at 3.9%. That means that out of the 114.11 million shares in the tradable float, 4.5 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 15.7%, or by about 610,000 shares. If the bears are caught leaning too hard into the quarter, then we could easily see a decent short-squeeze develop post-earnings. From a technical perspective, ZQK is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, with shares moving from its low of $2.09 to its recent high of $4.24 a share. During that uptrend, shares of ZQK have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed ZQK within range of triggering a major breakout trade post-earnings.