PriceSmart

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My final earnings short-squeeze candidate is specialty retailer player PriceSmart ( PSMT), which is set to release numbers on Wednesday after the market close. This company's business consists primarily of international membership shopping warehouse clubs similar to warehouse clubs in the U.S. Wall Street analysts, on average, expect PriceSmart to report revenue of $539.68 million on earnings of 69 cents per share.

The current short interest as a percentage of the float for PriceSmart is rather high at 8.2%. That means that out of the 21.13 million shares in the tradable float, 1.49 million are sold short by the bears. This is another low float high short interest situation, so if the bulls get the news they're looking for then a decent short-squeeze could develop post-earnings.

From a technical perspective, PSMT is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock plunged earlier this year from around $70 to a low of $56.31 a share on heavy volume. After that large move lower, the stock recovered quickly and has now run-up to its current price of $72.16. That rebound has pushed PSMT within range of triggering a big breakout trade post-earnings.

If you're bullish on PSMT here, I would look for long biased trades after its report if it triggers a major break out above some past overhead resistance at $77.50 to $78.40 a share with high-volume. Look for volume that hits close to or above its three-month average volume of 341,365 shares. If we get that action, I would then look for this stock to trend up towards $85 to $90 a share post-earnings.

I would simply avoid PSMT or look for short biased trades after its earnings report if the stock fails to break out and then drops below some near-term support at $71 a share with high-volume. Target a drop back below its 50-day moving average of $68.34 a share, and potentially down to its 200-day moving average of $64.93 a share if the bears hammer this lower post-earnings.

To see more potential earnings short squeeze plays, 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 Beconequity.com and maintains the website Maddmoney.net, 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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