Perry Ellis International
My final earnings short-squeeze play is apparel products player Perry Ellis International (PERY - Get Report), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Perry Ellis International to report revenue of $216.06 million on earnings of 3 cents per share.
The current short interest as a percentage of the float for Perry Ellis International sits at 5%. That means that out of the 11.50 million shares in the tradable float, 576,000 shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8.8%, or by about 46,000 shares. If the bears get caught pressing their bets into a bullish quarter, then shares of PERY could easily surge sharply higher post-earnings as the shorts jump to cover some of their trades.
From a technical perspective, PERY is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last two months, with shares moving lower from its high of $17.44 to its recent low of $12.37 a share. During that move, shares of PERY have been making mostly lower highs and lower lows, which is bearish technical price action. That said, shares of PERY have started to bounce off that $12.37 low and it's now starting to move within range of triggering a near-term breakout trade post-earnings.
If you're in the bull camp on PERY, 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 $14.49 to $14.63 a share and then once it takes out at its 50-day moving average of $14.66 with high volume. Look for volume on that move that hits near or above its three-month average volume of 109,151 shares. If that breakout triggers post-earnings, then PERY will set up to re-fill some of its previous gap-down-day zone that started at $15.85 a share. Any high-volume move above $15.85 will then give PERY a chance to tag its next major overhead resistance level at $17.44 a share.
I would avoid PERY 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 $13.50 to $13.43 a share with high volume. If we get that move, then PERY will set up to re-test or possibly take out its 52-week low of $12.37 a share. Any high-volume move below $12.37 to $12.22 a share will then give PERY a chance to tag $10 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.