I would simply avoid OVTI or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day moving average at $13.64 a share with high volume. If we get that move, then OVTI will set up to re-test or possibly take out its next major support levels at $12.50 to $12.06 a share.
Another potential earnings short-squeeze candidate is closeout retailer Big Lots ( BIG), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Big Lots to report revenue of $1.32 billion on earnings of 61 cents per share.
The current short interest as a percentage of the float for Big Lots is pretty high at 12.3%. That means that out of the 49.70 million shares in the tradable float, 7.85 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low float. Any bullish earnings news could easily send shares of BIG spiking higher post-earnings.>>3 Big Stocks on Traders' Radars From a technical perspective, BIG 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 five months, with shares moving higher from its low of $27.52 to its recent high of $39.22 a share. During that uptrend, shares of BIG have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of BIG within range of triggering a near-term breakout trade post-earnings. If you're bullish on BIG, 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 $39.22 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 789,269 shares. If we get that breakout, then BIG will set up to re-test or possibly take out its next major overhead resistance levels at $42.26 to $46 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 Plus 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