I would avoid GME 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 $25 to its 50-day moving average at $24.60 a share with high volume. If we get that move, then GME will set up to re-test or possibly take out its next major support levels at $23.36 to $22.32 a share.
One potential earnings short-squeeze candidate is
(FINL - Get Report)
, a mall-based specialty retailer of athletic shoes, apparel and accessories, which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Finish Line to report revenue of $452.34 million on earnings of 75 cents per share.
Just recently, shares of Finish Line were downgraded to underperform by Sterne Agee. The firm said that Finish Line is losing shares to Foot Locker and that the company's decision to open stores-within-stores at Macy's department stores will likely harm Finish Line's brand identity. Sterne Agee sees earnings coming in lower than expected both this year and next.
The current short interest as a percentage of the float for Finish Line is pretty high at 11.7%. That means that out of the 48.08 million shares in the tradable float, 5.74 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 20.1%, or by about 961,000 shares. If their bears are pressing their bets too aggressively into bullish quarter, then we could easily see shares of FINL spike sharply higher post-earnings.
From a technical perspective, FINL is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been trending sideways for the last month and change, with shares moving between $19.30 on the upside and $17.56 on the downside. A high-volume move above the upper-end of that recent range will possibly trigger a near-term breakout trade for shares of FINL post-earnings.
If you're bullish on FINL, 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 at $19.30 a share and then above its 200-day moving average of $20.07 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 962,118 shares. If that breakout triggers, then FINL will set up to re-test or possibly take out its next major overhead resistance levels at $21.34 to $23 a share.