My final earnings short-squeeze play is specialty retailer of men's suits and tuxedo rental products provider
, which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Men's Wearhouse to report revenue of $671.04 million on earnings of $1.14 per share.
The current short interest as a percentage of the float for Men's Wearhouse is pretty high at 8%. That means that out of the 47.67 million shares in the tradable float, 3.81 million shares are sold short by the bears. This is a decent short interest on a stock with relatively low float. Any bullish earnings news could easily spark a sharp short-covering rally for shares of MW post-earnings.
From a technical perspective, MW is currently trending well above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock recently pulled back from its July high of $41.03 a share to its low of $37.20 a share. Shares of MW have now started to rebound off that $37.20 low and it's quickly moving within range of triggering a big breakout trade.
If you're in the bull camp on MW, 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 $41 a share to its 52-week high at $41.03 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 521,077 shares. If that breakout hits, then MW will set up to enter new 52-week high territory, which is bullish technical price action. Some possible upside targets off that breakout are $45 to $50 a share.
I would avoid MW 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 $38 to $37.20 a share with high volume. If we get that move, then MW will set up to re-test or possibly take out its next major support levels at $35 to its 200-day at $34.02 a share. Any high-volume move below those levels will then put $32 to $31 into range for shares of MW.
To see more potential earnings short squeeze plays, check out the
Earnings Short Squeeze Plays
portfolio on Stockpickr.
-- Written by Roberto Pedone in Delafield, Wis.
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At the time of publication, author had no positions in stocks mentioned.
Roberto Pedone, based out of Delafield, Wis., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including CNBC.com
. You can follow Pedone on Twitter at www.twitter.com/zerosum24 or @zerosum24.