5 Earnings-Related Short-Squeeze Plays

If you're bullish on ANGO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $11.20 to its 200-day moving average at $11.54 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 91,003 shares. If that breakout hits, then ANGO will set up to re-test or possibly take out its next major overhead resistance level $12 a share. Any high-volume move above $12 will then give ANGO a chance to re-fill its previous gap down zone that started near $13 a share.

I would avoid ANGO or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day at $10.61 a share with heavy volume. If we get that move, then ANGO will set up to re-test or possibly take out its next major support levels at $10.25 to $10 a share. Keep in mind that any move below $10 will then push ANGO into new 52-week low territory, which is bearish technical price action.

National American University

My final earnings short-squeeze trade idea is National American University (NAUH), which is set to release numbers on Wednesday after the market close. This company is a provider of post-secondary education primarily focused on the needs of working adults and other non-traditional students. It provides Associate, Bachelor's and Master's degree and diploma program. Wall Street analysts, on average, expect National American University to report revenue of $34.72 million on earnings of 9 cents per share.

The current short interest as a percentage of the float for National American University stands at 3%. That means that out of the 7.48 million shares in the tradable float, 289,000 shares are sold short by the bears. This isn't a huge short interest, but it's more than enough to kickoff a decent short-squeeze if the bulls get the earnings news they're looking for.

From a technical perspective, NAUH is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last four months, with shares dropping from a high of $5.05 to its recent low of $3.22 a share. During that downtrend, shares of NAUH have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of NAUH have started to rebound off that $3.22 low and move within range of triggering a near-term breakout trade post-earnings.

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