From a technical perspective, DWA is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways for the last three months, with shares moving between $15.90 on the downside and $18.32 on the upside. A high-volume move above the upper-end of its recent sideways chart pattern could trigger a breakout trade for shares of DWA post-earnings.
If you're bullish on DWA, 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 $17.69 to $18.32 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.02 million shares. If that breakout triggers, then DWA will set up to re-test or possibly take out its next major overhead resistance levels at $19.82 to $22.98 a share.
I would avoid DWA 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 and its 52-week low of $15.90 a share with high volume. If we get that move, then DWA will set up to enter new 52-week low territory, which is bearish technical price action. Some possible downside targets off that move are $14 to $13 a share.
My final earnings short-squeeze trade idea is laboratory testing services player
, which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Bio-Reference Laboratories to report revenue of $168.42 million on earnings of 28 cents per share.
If you're looking for a heavily-shorted stock that's been beaten-down notably heading into its earnings report this week, then make sure to check out shares of Bio-Reference Laboratories. This stock has been moving lower in 2013, with shares off by 10.9% so far.
The current short interest as a percentage of the float for Bio-Reference Laboratories is very high at 39.9%. That means that out of the 27.71 million shares in the tradable float, 9.53 million shares are sold short by the bears. If the bulls get the news they're looking for, then BRLI could easily rip higher post-earnings, since the float here is small and the short interest is huge.