With that in mind, here's a look at several stocks that could experience big short squeezes when they report earnings this week.
My first earnings short-squeeze play is Lindsay (LNN - Get Report), which is set to release numbers on Tuesday before the market open. This company is a designer and manufacturer of self-propelled center pivot and lateral move irrigation systems which are used in the agricultural industry to increase or stabilize crop production while conserving water, energy and labor. Wall Street analysts, on average, expect Lindsay to report revenue of $131.98 million on earnings of 75 cents per share.The current short interest as a percentage of the float for Lindsay is rather high at 12.4%. That means that out of the 12.43 million shares in the tradable float, 1.54 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.2%, or by about 47,000 shares. If the bears are caught leaning too hard into this quarter, then we could see a large short-squeeze develop post-earnings. From a technical perspective, LNN is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strongly for the last four months, with shares soaring from a low of $64.36 to its recent high of $84.17 a share. During that uptrend, shares of LNN have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed LNN within range of triggering a breakout trade post-earnings. If you're bullish on LNN, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key overhead resistance levels at $84.17 to $84.98 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 120,295 shares. If that breakout hits, then LNN will set up to enter new 3-year high territory, which is bullish technical price action. Some possible upside targets off that breakout are $90 to $95 a share.