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Another earnings short-squeeze prospect is Cabela's (CAB), a specialty retailer of hunting, fishing, camping and outdoor merchandise, which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Cabela's to report revenue of $854.07 million on earnings of 71 cents per share.
The current short interest as a percentage of the float for Cabela's is very high at 15.6%. That means that out of the 50.70 million shares in the tradable float, 7.70 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 12.3%, or by about 845,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of CAB could easily experience a big short-squeeze post-earnings as the bears rush to cover some of their bets.
From a technical perspective, CAB is currently trending above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been downtrending badly for the last two months and change, with shares moving lower from its high of $71.80 to its recent low of $60.43 a share. During that move, shares of CAB have been consistently making lower highs and lower lows, which is bearish technical price action. That said, shares of CAB have now started to rebound off that $60.43 low, and it's quickly moving within range of triggering a near-term breakout trade post-earnings.
If you're bullish on CAB, 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 $65.16 to $67 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 674,169 shares. If that breakout hits, then CAB will set up to re-test or possibly take out its next major overhead resistance levels at $72 to its 52-week high at $72.54 a share. Any high-volume move above those levels will then give CAB a chance to tag $75 a share.
I would simply avoid CAB 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 $63 to its 200-day moving average at $61.73 a share with high volume. If we get that move, then CAB will set up to re-test or possibly take out its next major support levels at $60.43 to $58 a share.
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