Another earnings short-squeeze prospect is specialty retailer of women's apparel, shoes and accessories Ann (ANN), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Ann to report revenue of $581.99 million on earnings of 42 cents per share.
During the last quarter, this company reported revenue of $607.7 million and GAAP reported sales were 7.2% higher than the prior-year quarter's $566.7 million. Also during the last quarter, EPS was 5 cents per share and GAAP EPS was 5 cents per share, which was 25% higher than the prior-year quarter's 4 cents per share.
The current short interest as a percentage of the float for Ann is pretty high at 9.2%. That means that out of the 44.65 million shares in the tradable float, 4.22 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8.8%, or by about 342,000 shares. If the short-sellers are caught pressing their bets too hard into a bullish quarter, then shares of ANN could rip significantly higher post-earnings.
From a technical perspective, ANN is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock recently bounced right off its 50-day moving average at $29.72 a share and is now quickly moving within range of triggering a near-term breakout trade post-earnings.
If you're bullish on ANN, 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 its 200-day moving average of $32.44 a share and then once it takes out more key resistance levels at $32.80 to $33 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 1.09 million shares. If that breakout triggers, then ANN will set up to re-test or possibly take out its next major overhead resistance levels at $34.30 to $35.50 a share. Any high-volume move above $35.50 will then put $38 to $39 into range for shares of ANN.
I would avoid ANN 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 $29.72 a share and then below more support at $29.64 a share with high volume. If we get that move, then ANN will set up to re-test or possibly take out its next major support levels at $27.63 to $26.95 a share. Any high-volume move below $26.95 will then put $24 into range for shares of ANN.
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