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5 Heavy Shorts About to Report Earnings

I would simply avoid LNN or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some near-term support levels at $76.88 to $76 a share with heavy volume. If we get that move, then LNN will set up to re-test or possibly take out its next major support levels at $73.86 to $71.98 a share.

Apollo Group

Another potential earnings short-squeeze trade is Apollo Group (APOL - Get Report), which is set to release its numbers on Tuesday after the market close. This company offers distinctive educational programs and services both online and on-campus at the undergraduate, master's and doctoral levels. Wall Street analysts, on average, expect Apollo Group to report revenue of $1.03 billion on earnings of 90 cents per share.

This company has topped Wall Street estimates for the last four quarters in a row and it's coming off a quarter where it beat estimates by 3 cents, after reporting net income of 52 cents per share versus a mean estimate of 49 cents per share.

The current short interest as a percentage of the float for Apollo Group stands is very high at 14.7%. That means that out of the 98.93 million shares in the tradable float, 14.37 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then this stock could explode higher post-earnings.

From a technical perspective, APOL is currently trending above its 50-day moving average and well below its 200-day moving average, which is neutral trendwise. This stock has been uptrending for the last two months, with shares moving up from a low of $18.36 to its recent high of $22.48 a share. During that uptrend, shares of APOL have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed APOL within range of triggering a near-term breakout trade.

If you're in the bull camp on APOL, 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 at $22.48 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 2,819,510 shares. If that breakout triggers, then APOL will set up re-test or possibly take out its gap down day high from last October that sits just above $25 a share.

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AA $12.93 0.08%
APOL $18.72 -1.10%
GBX $57.62 -0.66%
LNN $75.46 -1.00%
SCHN $15.87 0.06%


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