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5 Heavily-Shorted Stocks Set to Report

Stocks in this article: SVU SNX XRTX PSMT CERE

I would simply avoid SVU or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day moving average of $2.73 a share with heavy volume. If we get that move, then SVU will set up to re-test or possibly take out its next major support level at $2.34 a share.

Synnex

Another potential earnings short-squeeze trade is Synnex ( (SNX), which is set to release its numbers on Thursday after the market close. This is a business process services company offering a comprehensive range of services to resellers, retailers, and original equipment manufacturers worldwide. Wall Street analysts, on average, expect Synnex to report revenue of $2.76 billion on earnings of $1.04 per share.

The current short interest as a percentage of the float for Synnex stands is pretty high at 11.9%. That means that out of the 25.98 million shares in the tradable float, 3.13 million shares are sold short by the bears. If this company can deliver the earnings news the bulls are looking for, then we could easily see a solid short-squeeze develop post-earnings.

From a technical perspective, SNX 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 two months, with shares moving higher from a low of $30.70 to its recent high of $35.81 a share. During that uptrend, shares of SNX have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed SNX within range of triggering a near-term breakout trade post-earnings.

If you're in the bull camp on SNX, 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 $35.81 to $35.88 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 133,982 shares. If that breakout hits, then SNX will set up re-test or possibly take out its next major overhead resistance level at $38.80 a share.

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