I would simply avoid AA or look for short-biased trades if after its report it fails to trigger that breakout, and then drops back below both its 200-day at $8.83 and its 50-day at $8.57 a share with heavy volume. If we get that move, then AA will set up to re-test or possibly take out its next major support levels at $8.20 to $7.98 a share. Any subsequent move below $7.91 a share would be very bearish, since that's a major support level that's marked the stock's 3-year low.
To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.
-- Written by Roberto Pedone in Winderemere, Fla.
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