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5 Earnings Short-Squeeze Plays

I would avoid OXM 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 $63 to $61.10 a share with high volume. If we get that move, then OXM will set up to re-test or possibly take out its next major support levels at $57.70 a share to its 200-day moving average at $57.09 a share.

Coldwater Creek

Another earnings short-squeeze prospect is specialty retailer of women's apparel, accessories, jewelry and gift items Coldwater Creek (CWTR), which is set to release numbers Tuesday after the market close. Wall Street analysts, on average, expect Coldwater Creek to report revenue of $162.81 million on a loss of 63 cents per share.

The current short interest as a percentage of the float for Coldwater Creek is very high at 18.8%. That means that out of the 12.17 million shares in the tradable float, 3.47 million shares are sold short by the bears. This is a big short interest on a stock with a very low tradable float. If the bulls get the earnings news they're looking for, then this stock could easily explode higher post-earnings.

From a technical perspective, CWTR is currently trending just below its 50-day moving average and well below its 200-day moving average, which is bearish. This stock has been trending sideways for the last two months, with shares moving between $2.16 on the downside and $2.80 on the upside. A high-volume move above the upper-end of its recent range could trigger a breakout trade for CWTR post-earnings.

If you're bullish on CWTR, 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 $2.51 to $2.69 a share and then once it takes out more resistance at $2.80 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 192,994 shares. If that breakout hits, then CWTR will set up to re-fill some of its previous gap down zone from June that started near $3.60 a share.
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CWTR $0.02 0.87%
OXM $64.15 -1.94%
PBY $18.50 0.05%
RH $39.42 -4.83%
VRA $17.09 -1.21%


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