If you're in the bull camp on MAKO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average at $11.81 a share and then once it clears more near-term overhead resistance levels at $12.54 to $13.28 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 1.15 million shares. If that breakout triggers, then MAKO will set up to re-test or possibly take out its next major overhead resistance levels at $15 to $16.28 a share.
I would simply avoid MAKO or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support levels at $10.95 to $10.35 a share with high volume. If we get that move, then MAKO will set up to enter new 52-week low territory below $10.35 a share, which is bearish price action. Some possible downside targets off that move are $9.28 to $8 a share.
One potential earnings short-squeeze candidate is specialty retail store operator
(SHLD - Get Report)
, which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Sears to report revenue of $11.77 billion on earnings of 98 cents per share.
If you're looking for a heavily-shorted stock that's been uptrending decent heading into its earnings report this week, then make sure to take a hard look at shares of Sears. This stock has been trending higher in 2013, with shares up 9.2% so far.
The current short interest as a percentage of the float for Sears is pretty high at 10.9%. That means that out of the 41.83 million shares in the tradable float, 8.55 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of SHLD could easily get squeezed higher post-earnings.
From a technical perspective, SHLD is currently trending above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been uptrending strong for the last two months, with shares moving higher from its low of $38.40 to its recent high of $49.18 a share. During that uptrend, shares of SHLD have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of SHLD within range of triggering a near-term breakout trade post-earnings.