This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
$1 buys you full access to ALL of TheStreet's Subscription Services! Learn More

5 Heavily-Shorted Stocks About to Report Earnings

Stocks in this article: RIMMKBHDRIWGOKMX

From a technical perspective, DRI is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock recently gapped down big from around $53 a share to below $47 a share with heavy volume. Following that gap down, shares of DRI went on to print a new low of $45.26 a share. Shares of DRI have since then started to rebound and approach a near-term breakout trade back above its gap down day high.

If you're bullish on DRI, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its gap down day high of $48.58 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1,516,740 shares. If that breakout triggers, then DRI will set up to re-fill some of that previous gap that started near $53 a share.

I would avoid DRI or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its recent low print of $45.26 a share with high volume. If we get that move, then DRI will set up to re-test or possibly take out its next major support levels at $42 to $40.15 a share.

Winnebago Industries

Another earnings short-squeeze trade idea is Winnebago Industries (WGO), which is set to release numbers on Thursday before the market open. This is manufacturer of motor homes which are self-contained recreation vehicles used mainly in leisure travel and outdoor recreation activities. Wall Street analysts, on average, expect Winnebago Industries to report revenue of $155.29 million on earnings of 10 cents per share.

If you're looking for a heavily-shorted stock that's been uptrending very strong heading into its earnings report, then make sure to check out shares of Winnebago Industries. This stock has been trending very hot so far in 2012, with shares up a whopping 93%.

The current short interest as a percentage of the float for Winnebago Industries is notable at 6.4%. That means that out of the 27.99 million shares in the tradable float, 1.80 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 7.2%, or by about 121,000 shares. This isn't a huge short interest, but it's more than enough to spark a decent short-covering rally if the bulls get the earnings news they're looking for.

5 of 7

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,810.06 +91.06 0.51%
S&P 500 2,063.50 +10.75 0.52%
NASDAQ 4,712.97 +11.1030 0.24%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs