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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.

CalAmp

My first earnings short-squeeze play is wireless communications solutions provider CalAmp (CAMP) - Get CalAmp Corp. Report , which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect CalAmp to report revenue of $68.02 million on earnings of 26 cents per share.

The current short interest as a percentage of the float for CalAmp is pretty high at 9.8%. That means that out of the 34.61 million shares in the tradable float, 3.42 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 8.9%, or by about 278,000 shares. If the bears get caught pressing their bets into a bullish quarter, then this stock could easily spike sharply higher post-earnings as the bears move fast to cover some of their trades.

From a technical perspective, CalAmp is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways and consolidating for the last month and change, with shares moving between $15.76 on the downside and $17.32 on the upside. Any high-volume move above the upper-end of its recent sideways trending chart pattern post-earnings could trigger a big breakout trade for shares of CalAmp post-earnings.

If you're bullish on CalAmp, 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 $16.63 a share and then above more resistance levels at $17.32 to its 200-day moving average of $18.09 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 462,422 shares. If that breakout triggers post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $20 to $20.50, or even $22 a share.

I would simply avoid CalAmp 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 $15.76 to $15.68 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 $14.01 to around $12 a share.

Energy XXI

Another potential earnings short-squeeze trading opportunity is independent oil and gas player Energy XXI (EXXI) , which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Energy XXI to report revenue $263.42 million on a loss of $1.22 per share.

The current short interest as a percentage of the float for Energy XXI is extremely high at 31.6%. That means that out of the 85.63 million shares in the tradable float, 27.09 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then shares of Energy XXI could easily explode sharply higher post-earnings as the bears move fast to cover some of their positions.

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From a technical perspective, Energy XXI is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last six months, with shares moving lower from its high of $4.36 to its recent low of 98 cents per share. During that downtrend, shares of Energy XXI have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're in the bull camp on Energy XXI, 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 $1.11 to $1.20 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 2.54 million shares. If that breakout gets set off post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $1.40 to its 20-day moving average of $1.46 a share, or even its 50-day moving average of $1.57 a share.

I would simply avoid Energy XXI or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its new 52-week low of 98 cents per share with high volume. If we get that move, then this stock will set up to enter new 52-week-low territory, which is bearish technical price action.

Micron Technology

Another potential earnings short-squeeze candidate is semiconductor solutions provider Micron Technology (MU) - Get Micron Technology, Inc. Report , which is set to release numbers on Thursday after the market close. Wall Street analysts, on average, expect Micron Technology to report revenue of $3.56 billion on earnings of 33 cents per share.

The current short interest as a percentage of the float for Micron Technology stands at 5.9%. That means that out of the 1.07 billion shares in the tradable float, 63.35 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.6%, or by around 2.22 million shares. If the bears get caught pressing their bets into a strong quarter, then this stock could easily soar sharply higher post-earnings as the bears scramble to cover some of their positions.

From a technical perspective, Micron Technology is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last six months, with shares moving lower from its high of around $30 a share to its recent low of $13.50 a share. During that downtrend, shares of Micron Technology have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're bullish on Micron Technology, 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 $15.59 to its 20-day moving average of $16.13 a share and above its 50-day moving average of $16.97 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 33.34 million shares. If that breakout develops post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at 17.97 to $19 a share, or even $20 to $20.50 a share.

I would avoid Micron Technology or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its new 52-week low of $13.50 a share with high volume. If we get that move, then this stock will set up to enter new 52-week-low territory, which is bearish technical price action. Some possible downside targets off that move are $12.30 to $10 a share.

Actuant

Another earnings short-squeeze prospect is diversified machinery player Actuant (ATU) , which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Actuant to report revenue of $294.21 million on earnings of 29 cents per share.

The current short interest as a percentage of the float for Actuant is pretty high hat 7.1%. That means that out of 54.42 million shares in the tradable float, 3.91 million shares are sold short by the bear. The bears have also been increasing their bets from the last reporting period by 6.9%, or by around 253,000 shares. If the bears get caught pressing their bets into a bullish quarter, then this stock could easily jump sharply higher post-earnings as the bears rush to cover some of their positions.

From a technical perspective, Actuant is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last five months, with shares sliding sharply lower from its high of $25.44 to its recent low of $17.51 a share. During that downtrend, shares of Actuant have been consistently making lower highs and lower lows, which is bearish technical price action.

If you're bullish on Actuant, 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 $18.50 to its 20-day moving average of $19.18 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 748,403 shares. If that breakout fires off post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $20.24 to its 50-day moving average of $21.07, or even $21.50 to $23 a share.

I would simply avoid Actuant or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some major support levels at its 52-week low of $17.51 a share to some major previous support at $17.33 a share with high volume. If we get that move, then this stock will set up to enter new 52-week-low territory, which is bearish technical price action. Some possible downside targets off that move are $15 to $14 a share.

Landec

My final earnings short-squeeze play is food and biomedical materials player Landec (LNDC) - Get Landec Corporation Report , which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Landec to report revenue of $141.46 million on earnings of 13 cents per share.

The current short interest as a percentage of the float for Landec is notable at 4.6%. That means that out of the 23.72 million shares in the tradable float, 1.09 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 6.3%, or by around 64,000 shares. If the bears get caught pressing their bets into a strong quarter, then this stock could easily trend sharply higher post-earnings as the bears jump to cover some of their trades.

From a technical perspective, Landec is currently trending below both its 50-day and 200-day moving averages, which is bearish technical price action. This stock has been downtrending over the last three months and change, with shares moving lower off its high of $14.98 to its recent low of $11.50 a share. During that downtrend, shares of Landec have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're in the bull camp on Landec, 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 $12.75 a share to both its 20-day moving average of $12.98 and its 50-day moving average of $13.10 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 72,344 shares. If that breakout gets started post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $13.50 to its 200-day moving average of $13.86, or even $14.50 to $15 a share.

I would avoid Landec or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some near-term support levels at $11.50 to its 52-week low of $10.75 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 $9.84 to $9, or even $8.86 to $8.50 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.