Schnitzer Steel Industries
Another earnings short-squeeze prospect is recycled ferrous metal products manufacturer and export player Schnitzer Steel Industries (SCHN - Get Report), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Schnitzer Steel Industries to report revenue of $665.52 million on earnings of 10 cents per share.
The current short interest as a percentage of the float for Schnitzer Steel Industries is very high at 12.6%. That means that out of the 25.20 million shares in the tradable float, 3.19 million shares are sold short by the bears. This is a large short interest on a stock with a very low tradable float. Any bullish earnings news could easily send shares of SCHN ripping higher post-earnings as the bears rush to cover some of their bets.
From a technical perspective, SCHN is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock recently formed a double bottom chart pattern at $24.58 to $24.71 a share. Following that bottom, shares of SCHN have started to uptrend and move back above both of its 50-day and 200-day moving averages. That move has now pushed shares of SCHN within range of triggering a near-term breakout trade post-earnings.
If you're bullish on SCHN, 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 $29.56 to $29.97 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 298,570 shares. If that breakout hits, then SCHN will set up to re-test or possibly take out its next major overhead resistance levels at its 52-week high of $33.32 a share. Any high-volume move above that level will then give SCHN a chance to tag $40 a share.
I would simply avoid SCHN or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 200-day at $27.34 a share to its 50-day at $26.63 a share with high volume. If we get that move, then SCHN will set up to re-test or possibly take out its next major support levels at $24.50 to its 52-week low of $23.07 a share, or even $21.75 a share.