I would avoid FINL 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 $17.76 to $17.56 a share with high volume. If we get that move, then FINL will set up to re-test or possibly take out its 52-week low of $16.87 a share, which is bearish technical price action.
Another earnings short-squeeze prospect is heavy construction materials supplier
, which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Texas Industries to report revenue of $140.98 million on a loss of 41 cents per share.
The current short interest as a percentage of the float for Texas Industries is very high at 15%. That means that out of the 12.63 million shares in the tradable float, 3.13 million shares are sold short by the bears. This stock has a high short interest and a very low tradable float. Any bullish earnings news could easily spark a solid short-covering rally for shares of TXI post-earnings.
From a technical perspective, TXI is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending very strong for the last six months, with shares soaring higher from its low of $39.52 to its 52-week high of $67.44 a share. During that move uptrend, shares of TXI have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of TXI within range of triggering a near-term breakout trade post-earnings.
If you're bullish on TXI, then I would wait until after its report and look for long-biased trades if this stock manages to print a new 52-week high above $67.44 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 341,270 shares. If we get that move, then TXI will have a great chance of trending well north of $70 a share.