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DELAFIELD, Wis. (Stockpickr) -- Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting very bullish technically and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if Wall Street doesn't like the numbers or guidance.

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, let's take a look at several stocks that could experience big short squeezes when they report earnings this week.

BlackBerry

My first earnings short-squeeze play is wireless communications solutions player BlackBerryundefined , which is set to release numbers on Friday before the market open. Wall Street analysts, on average, expect BlackBerry to report revenue of $610.99 million on a loss of 9 cents per share.

The current short interest as a percentage of the float for BlackBerry is very high at 18.8%. That means that out of the 489.50 million shares in the tradable float, 92.14 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of BlackBerry could easily rip sharply higher post-earnings as the bears move fast to cover some of their trades.

From a technical perspective, BlackBerry is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways over the last few weeks, with shares moving between $7.17 on the downside and $7.82 on the upside. Any high-volume move above the upper-end of its recent sideways trending chart pattern post-earnings could easily trigger a big breakout trade for shares of BlackBerry.

If you're bullish on BlackBerry, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average of $7.51 a share and then above more key resistance levels at $7.73 to $7.82 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 8.05 million shares. If that breakout hits post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $8.16 to $8.50, or even $9 to $9.30 a share.

I would simply avoid BlackBerry 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 at $7.17 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support level at its 52-week low of $6.41 a share.

Cintas

Another potential earnings short-squeeze trade idea is business services player Cintas (CTAS) - Get Cintas Corporation Report , which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Cintas to report revenue $1.17 billion on earnings of 90 cents per share.

The current short interest as a percentage of the float for Cintas is notable at 4.4%. That means that out of the 89.42 million shares in the tradable float, 3.99 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.7%, or by about 140,000 shares. If bears get caught pressing their bets into a bullish quarter, then this stock could easily spike sharply higher post-earnings as the bears rush to cover some of their positions.

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From a technical perspective, Cintas is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last few weeks, with shares moving higher from its low of $78 to its recent high of $87.64 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action.

If you're in the bull camp on Cintas, 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 $87.64 to its 52-week high of $89.74 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 613,512 shares. If that breakout triggers post-earnings, then this stock will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $100 to $110 a share.

I would simply avoid Cintas 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 at its 20-day moving average of $85.25 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at its 200-day moving average of $82.82 to $81, or even $78 a share.

Scholastic

Another potential earnings short-squeeze candidate is children's books publishing player Scholastic (SCHL) - Get Scholastic Corporation Report , which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Scholastic to report revenue of $187.30 million on a loss of $1.51 per share.

The current short interest as a percentage of the float for Scholastic is notable at 5.3%. That means that out of the 29.39 million shares in the tradable float, 1.65 million shares are sold short by the bears. If this company can deliver the earnings news the bulls are looking for, then shares of Scholastic could easily rip sharply higher post-earnings as the bears scramble to cover some of their positions.

From a technical perspective, Scholastic is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last few weeks, with shares moving higher from its low of $39.87 to its recent high of $44.24 a share. During that uptrend, shares of Scholastic have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a big breakout trade post-earnings.

If you're bullish on Scholastic, 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 $44.24 to $45 and then above its 52-week high of $46.28 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 187,580 shares. If that breakout develops post-earnings, then this stock will set up to enter new 52-week-high territory above $46.28, which is bullish technical price action. Some possible upside targets off that move are $55 to $60 a share.

I would avoid Scholastic 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 at around $42 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at its 200-day moving average of $40.30 to $39.87, or even $38 to $37 a share.

KB Home

Another earnings short-squeeze prospect is homebuilding player KB Home (KBH) - Get KB Home Report , which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect KB Home to report revenue of $81.53 million on earnings of 22 cents per share.

The current short interest as a percentage of the float for KB Home is very high at 18.2%. That means that out of 80.70 million shares in the tradable float, 14.75 million shares are sold short by the bear. The bears have also been increasing their bets from the last reporting period by 15.6%, or by about 1.98 million shares. If bears get caught pressing their bets into a strong quarter, then this stock could easily trend sharply to the upside post-earnings as the bears move fast to cover some of their positions.

From a technical perspective, KB Home is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit over the last few weeks, with shares moving higher from its low of $13.50 to its recent high of $15.52 a share. During that uptrend, shares of KB Home have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a near-term breakout trade post-earnings.

If you're bullish on KB Home, 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 its 200-day moving average of $14.93 to its 50-day moving average of $15.18 and then above more resistance at $15.52 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 2.96 million shares. If that breakout materializes post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $16.76 to $17.39, or even $18 to $19 a share.

I would simply avoid KB Home 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 to $13.83 and then below $13.50 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at $12 to $11.70 a share.

Finish Line

My final earnings short-squeeze trading opportunity is athletic shoes specialty retailer Finish Line (FINL) , which is set to release numbers on Friday before the market open. Wall Street analysts, on average, expect Finish Line to report revenue of $491.15 million on earnings of 57 cents per share.

The current short interest as a percentage of the float for Finish Line is pretty high at 10.3%. That means that out of the 43.88 million shares in the tradable float, 4.54 million shares are sold short by the bears. This is a reasonably low float high short-interest situation stock. Any bullish earnings news could easily set off a large short-covering rally for shares of Finish Line post-earnings that forces the bears to cover some of their positions.

From a technical perspective, Finish Line is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly over the last two months ,with shares falling sharply off its high of $28.95 to its recent low of $24.30 a share. During that downtrend, shares of Finish Line have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're in the bull camp on Finish Line, 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 its 200-day moving average of $25.51 and its 20-day moving average of $25.66 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 880,027 shares. If that breakout kicks off post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $26.80 to $27, or even $29 a share.

I would avoid Finish Line 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 $24.30 to $24 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at $23 to $22, or even $20 to $19 a share.

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