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My final earnings short-squeeze play is specialty retailer of natural and organic groceries and dietary supplements
Natural Grocers by Vitamin Cottage(NGVC - Get Report), which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Natural Grocers by Vitamin Cottage to report revenue of $92.43 million on earnings of 8 cents per share.
The current short interest as a percentage of the float for Natural Grocers by Vitamin Cottage stands is pretty high at 14.7%. That means that out of the 4.67 million shares in the tradable float, 1.36 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 9.7%, or by about 119,000 shares. If the short-sellers are caught leaning too hard into a bullish quarter, then shares of NGVC could explode higher post-earnings.
From a technical perspective, NGVC is currently trending above its 50-day moving average, which is bullish. This stock has been uptrending strong for the last month, with shares soaring from its low of $17.47 to its recent high of $20.88 a share. During that uptrend, shares of NGVC have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of NGVC within range of triggering a major breakout trade post-earnings.
If you're in the bull camp on NGVC, 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 $20.88 to $21.47 a share and then once it clears more overhead resistance at $22.46 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 109,442 shares. If that breakout triggers, then NGVC will set up to re-test or possibly take out its 52-week high of $25 a share.
I would simply avoid NGVC 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 $19.72 a share with high volume. If we get that move, then NGVC will set up to re-test or possibly take out its next major support levels at $18 to $17.47 a share. Any move below $17.47 will then push NGVC within range of taking out its 52-week low of $17.20 a share.
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.