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Another potential earnings short-squeeze play is casual dining restaurant chain
Red Robin Gourmet Burgers (
RRGB), which is set to release its numbers Thursday before the market open. Wall Street analysts, on average, expect Red Robin Gourmet Burgers to report revenue of $239.61 million on earnings of 66 cents per share.
The current short interest as a percentage of the float for Red Robin Gourmet Burgers is pretty high at 9.1%. That means that out of the 12.82 million shares in the tradable float, 1.17 million shares are sold short by the bears. This is a decent short interest on a stock with a very low tradable float. If the bulls get the earnings news they're looking for, then shares of RRGB could spike substantially higher post-earnings.
From a technical perspective, RRGB 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 uptrending strong for the last six months, with shares soaring higher from its low of $36 to its recent high of $61.28 a share. During that uptrend, shares of RRGB have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RRGB within range of triggering a near-term breakout trade.
If you're in the bull camp on RRGB, 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 $58.36 to its 52-week high at $61.28 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 141,355 shares. If that breakout hits, then RRGB will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $70 to $75 a share.
I would simply avoid RRGB 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 $55.27 to $53.01 a share with high volume. If we get that move, then RRGB will set up to re-test or possibly take out its next major support levels at $50 to $46 a share.
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