My final earnings short-squeeze trade idea is industrial and construction supplies retailer Fastenal (FAST), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Fastenal to report revenue of $815.10 million on earnings of 37 cents per share.
The current short interest as a percentage of the float for Fastenal sits at 6.5%. That means that out of the 271.81 million shares in the tradable float, 17.77 million shares are sold short by the bears. This isn't a giant short interest, but it's more than enough to send shares of FAST sharply higher post-earnings if the company gives the bulls the earnings news they're looking for.From a technical perspective, FAST is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been downtrending for the last month and change, with shares dropping from its high of $53.38 to its recent low of $48.33 a share. During that downtrend, shares of FAST have been mostly making lower highs and lower lows, which is bearish technical price action. That said, FAST has started to bounce off that $48.33 low, and it's now quickly moving within range of triggering a near-term breakout trade post-earnings. If you're in the bull camp on FAST, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day at $50.79 a share and then above more resistance at $51.70 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.58 million shares. If that breakout triggers, then FAST will set up to re-test or possibly take out its 52-week high at $53.83 a share. Any high-volume move above $53.83 will put FAST within range of hitting $55 to $60 a share. I would simply avoid FAST 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 $48.33 a share with high volume. If we get that move, then FAST will set up to re-test or possibly take out its next major support level at its 200-day moving average of $44.81 a share or at $42 a share. To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
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