My first earnings short-squeeze trade idea is Titan Machinery (TITN - Get Report), which owns and operates a network of full-service agricultural and construction equipment stores in the U.S. and Europe. Titan is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect it to report revenue of $725.07 million on earnings of 20 cents per share.
The current short interest as a percentage of the float for Titan Machinery is extremely high at 34.6%. That means that out of the 16.98 million shares in the tradable float, 5.89 million shares are sold short by the bears. This is a monster short interest on a stock with a very low tradable float. Any bullish earnings news could set this stock off on a massive squeeze higher post-earnings.
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From a technical perspective, TITN is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending for the last three months, with shares sliding lower from its high of $18.24 to its recent low of $14.57 a share. During that downtrend, shares of TITN have been consistently making lower highs and lower lows, which is bearish technical price action.
If you're bullish on TITN, 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 $15.50 to its 50-day moving average of $15.91 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 203,163 shares. If that breakout hits, then TITN will set up to re-test or possibly take out its next major overhead resistance levels at $17 to its 200-day moving average of $17.19 a share. Any high-volume move above those levels will then give TITN a chance to tag or take out $18 to $20 a share.
I would simply avoid TITN 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 $14.57 to its 52-weeek low at $14.19 a share high volume. If we get that move, then TITN will set up to enter new 52-week-low territory, which is bearish technical price action.