I would avoid BBRY 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 at $13.64 a share with high volume. If we get that move, then BBRY will set up to re-test or possibly take out its next major support levels at $12.56 to $12.15 a share.
Another potential earnings short-squeeze play is multichannel video game retailer
(GME - Get Report)
, which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect GameStop to report revenue of $3.45 billion on earnings of $2.09 per share.
Just recently, Wedbush Securities said it's maintaining its outperform rating on GameStop with a 12-month price target of $33, citing GameStop's strong revenue and earnings growth potential from continued market share gains, digital growth and its repurchase program.
The current short interest as a percentage of the float for GameStop is extremely high at 36.5%. That means that out of the 118.34 million shares in the tradable float, 43.24 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.5%, or by about 2.24 million shares. If the bears are caught being too aggressive into a strong quarter, then shares of GME could easily rip higher post-earnings.
From a technical perspective, GME is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending relatively strong for the last month, with shares moving higher from its low of $23.36 to its intraday high of $26.35 a share. During that uptrend, shares of GME have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of GME within range of triggering a near-term breakout trade post-earnings.
If you're in the bull camp on GME, 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 $26.71 to $28.04 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.12 million shares. If that breakout triggers, then GME will set up to enter new 52-week-high territory above $28.35, which is bullish technical price action. Some possible upside targets off that breakout are $30 to $35 a share.