Sunrise Senior Living

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My final earnings short-squeeze candidate today is Sunrise Senior Living ( SRZ), which is set to release numbers on Thursday after the market close. This company is a provider of senior living services in the U.S., Canada and the U.K. Wall Street analysts, on average, expect Sunrise Senior Living to report revenues of $337.09 million on a loss of 7 cents per share.

The current short interest as a percentage of the float for Sunrise Senior Living is very high at 14.5%. That means that out of the 39.50 million shares in the tradable float, 8.08 million shares are sold short by the bears.

From a technical perspective, SRZ is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been trading range bound for the past month between $8.38 and around $7.50 a share. A high-volume move outside of that range should set up the next big trend for SRZ post-earnings.

If you're bullish on SRZ, I would wait until after it reports earnings and consider long-biased trades if the stock triggers a near-term breakout above $8.38 with high-volume. Look for volume that registers near or well above its three-month average volume of 627,023 shares. If we get that action, this stock has a great chance of making a run at $10 to $11 a share post-earnings.

I would look only for short-biased trades or avoid SRZ after earnings if it fails to break out and then trades below some near-term support at $7.50 with volume. If we see that action, I would target a drop back towards its 200-day moving average of $6.91, or down to its next major support zones at $6.50 to $6 a share.

To see more potential earnings short squeeze plays, including Motricity ( MOTR), Quepasa ( QPSA) and Ascena Retail Group ( ASNA), check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


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At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to and maintains the website, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.

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