Bank of the Ozarks

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My first earnings short-squeeze play is regional banking player Bank of the Ozarks ( OZRK), which is set to release its numbers on Thursday after the market close. Wall Street analysts, on average, expect Bank of the Ozarks to report revenue of $60.22 million on earnings of 51 cents share.

If you're looking for a heavily shorted strong-trending banking name, then make sure to check out shares of Bank of the Ozarks ahead of its earnings report. This stock is trading just one point off if its 52-week high of $32.26 ahead of its quarter.

The current short interest as a percentage of the float for Bank of the Ozarks is rather high at 12.1%. That means that out of the 29.29 million shares in the tradable float, 3.54 million shares are sold short by the bears. The bears have also been increasing their short positions from the last reporting period by 3.2%, or by about 108,000 shares. This is a low float high short-interest situation, so any bullish earnings news could easily spark a large short-covering rally post-earnings.

From a technical perspective, OZRK is currently trading above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last six months, since shares of advanced from a low of $22.94 to its recent 52-week high of $32.26 a share. During that uptrend, the stock has consistently made higher lows and higher highs, which is bullish price action.

If you're bullish on OZRK, I would wait until after they report and look for long biased trades if this stock breaks out to a new 52-week high above $32.26 a share with high-volume. Look for volume that's near or well above its three-month average action of 223,781 shares. If we get that action, then look for OZRK to make a run at $35 to $40 a share if the bulls gain full control of this stock post-earnings.

I would simply avoid OZRK or look for short biased trades if after earnings this stock fails to break out to a new 52-week high, and then drops below its 50-day moving average of $30.15 a share with heavy volume. Target a drop back towards $28 to $27 a share or possibly lower if the bears spark a notable selloff post-earnings.

Bank of the Ozarks shows up on a recent list of 9 Stocks That Prove Dividends Make All the Difference.

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