I would avoid TXI or look for short-biased trades if after earnings it fails to trigger that move, and then drops back below some key near-term support levels at $62.50 a share to its 50-day moving average at $60.32 a share with high volume. If we get that move, then TXI will set up to re-test or possibly take out its next major support levels at $57.50 to $55.80 a share.
My final earnings short-squeeze play is retail discount store and full-service pharmacy operator Fred's (FRED), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Fred's to report revenue of $533.94 million on earnings of 20 cents per share.
The current short interest as a percentage of the float for Fred's is pretty high at 10.6%. That means that out of the 33.10 million shares in the tradable float, 3.62 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.9%, or by about 199,000 shares. If the short-sellers are caught leaning too hard into a solid quarter, then we could easily see shares of FRED rip higher post-earnings.From a technical perspective, FRED is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last two months and change, with shares soaring higher from its low of $12.25 to its recent high of $14.53 a share. During that uptrend, shares of FRED have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of FRED within range of triggering a major breakout trade post-earnings. If you're in the bull camp on FRED, 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 $14.53 to $15.54 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 210,920 shares. If that breakout triggers, then FRED will set up to enter new 52-week-high territory above $15.98, which is bullish technical price action. Some possible upside targets off that breakout are $17 to $20 a share.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV