(Cree earnings outlook story update for Gabelli outlook, gross margin estimates, Canaccord LED market outlook)

NEW YORK ( TheStreet) -- Shares of LED bellwether Cree ( CREE) continued down to yet another new 52-week low during trading on Thursday, as one more bearish CREE earnings outlook was released. Trading in Cree shares was elevated for the second straight day, and Cree shares traded as low as $40.44 on Thursday morning, though by the afternoon the 52-week low level for Cree was at $40.70.

Cree announced on Tuesday that it will report its earnings next Tuesday, April 19. The Cree earnings preview game from Wall Street has begun, and one Cree earnings preview report out on Wednesday from long-time Cree bear Brigantine Advisors was pointed to as one factor further pressuring Cree shares.

On Thursday, Gabelli Securities, another Cree bear, released its earnings preview and predicted continued gross margin compression for Cree into 2012.

Cree shares have declined to a series of new 52-week lows since March 22, when the LED company lowered its guidance for the upcoming quarterly results, the latest in a string of earnings disappointments for Cree. Cree has trended down in trading every day this week; even though it's seen a succession of new 52-week lows, there has been no buy on the weakness ahead of earnings.

Brigantine Advisors analyst Ramesh Misra, who first went to a sell on Cree in January 2010 -- one quarter before the company began reporting a series of earnings disappointments -- said on Wednesday morning that conditions will remain weak in the LED space for the next 18 months to 24 months.

Cree shares declined by 4% on Wednesday. On Thursday, Cree shares declined by another 1%

Brigantine's Misra said that he's not taking credit for the latest Cree decline, and believes it's a combination of the fact that the company announced the date for its next earnings and Wall Street overall needing to be more conservative with Cree earnings previews given the string of recent financial misses.

The Brigantine analyst's Cree preview more or less makes the case that Cree has now set the bar so low that it won't miss when it reports, but that doesn't mean that conditions are improving in the LED market.

"After recently pre-announcing lower than originally expected results for fQ3'11 (March), we think there are likely to be few surprises when Cree reports actual results next week and numbers could possibly come at the upper end of the new guidance as management may have sought to set the bar low.... We believe the outlook for LED pricing over the next 18-24 months remains negative, as global production volumes will continue to expand vigorously as the new production tools are brought online, followed by continuous yield improvement. Despite the 35% decline in the stock since the beginning of the year, Cree is still expensive at 25x our CY11 EPS estimate," Misra wrote.

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