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Basic materials player U.S. Steel Corporation Inc. (X) - Get United States Steel Corporation Report is set to report earnings on Tuesday after the market close. Wall Street analysts, on average, expect United States Steel to report revenue of $2.96 billion on earnings of 34 cents per share.

United States Steel is one of the biggest pure-play steel players, with a market cap of $4.34 billion. Another player in the space, AK Steel Holdings Corporation (AKS) - Get AK Steel Holding Corporation Report , reported positive earnings Tuesday morning before the market open. It reported a second-quarter profit of $61.2 million on earnings of 19 cents per share. Those results topped Wall Street estimates of a profit of 13 cents per share. The stock was trading up 12% in postmarket trading Tuesday. These results could bode well and be a tell for a strong quarter out of U.S. steel when it reports later Tuesday.

Shares of United States Steel are higher midday, but well off their February high of $41.73 a share. AK Steel was down significantly prior to its report Tuesday morning, with the stock well off its January high of $11.28 a share.

The current short interest as a percentage of the float for United States Steel is very high, at 19.2%. That means that out of the 169.68 million shares in the tradable float, 32.61 million shares are sold short by the bears. This is a large short interest, and with 1.7 days-to-cover, we could see a significant earnings short-squeeze trade develop for this stock post-earnings.

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If you take a look at the chart for United States Steel, you'll notice that this stock has been uptrending strong over the last three months, with shares moving higher off its low of $18.55 to its intraday high on Tuesday of $24.95 a share. During that uptrend, this stock has been consistently making higher lows and higher highs, which is bullish technical price action. That strong uptrend is now quickly pushing this stock within range of triggering a major breakout trade post-earnings that could squeeze the bears badly.

Traders should now look for long-biased trades in United States Steel either before they report to anticipate, or after if this stock manages to break out above some near-term overhead resistance levels at $25 to $26 a share with strong volume. Look for volume on that move that registers near or above its three-month average action of 20.98 million shares. If that breakout triggers post-earnings, then this stock will set up to re-fill some of its previous gap-down-day zone from April that started at $32 a share.

The bottom line, if this stock moves strongly into that gap with volume post-earnings, then we have a good a chance to see the shorts get squeezed hard. That entire gap back to $32 a share could easily get filled, or we could even see this stock tag its next significant resistance levels at $35 to $37 a share.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.