If you're in the bull camp on BBY, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 52-week high at $44.66 a share (or Monday's intraday high if higher) with high volume. Look for volume on that move that hits near or above its three-month average volume of 5.89 million shares. If that breakout hits, then BBY will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $55 to $60 a share.
I would avoid BBY 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 $42 to its 50-day at $40.49 a share with high volume. If we get that move, then BBY will set up to re-test or possibly take out its next major support levels at $38 to $34 a share.
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.
Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV