Fastenal

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Another potential earnings short-squeeze trade is industrial and construction supplies retailer Fastenal ( FAST), which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Fastenal to report revenue of $768.56 million on earnings of 35 cents per share.

This company met Wall Street estimates last quarter after beating estimates in the previous two quarters. Fastenal is aiming to continue its streak of solid results for its top line. Revenue has trended higher by double digits in each of the last four quarters with an average growth of 22%. The company is also going for its fourth straight quarter of income increases. Net income jumped 36.1% in the second quarter of the last fiscal year and 29.1% in the third quarter before trending higher in the fourth quarter.

The current short interest as a percentage of the float for Fastenal stands at 6.8%. That means that out of the 269 million shares in the tradable float, 18.42 million are sold short by the bears.

From a technical perspective, FAST is currently trading above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been uptrending strong for the last six months, with shares jumping from under $40 a share to a recent high of $55.05 a share. That said, the stock recently broke back below its 50-day moving average of $51.67 on heavy volume.

If you're bullish on FAST, I would wait until after they report earnings and look for long biased trades if this stock can break back above its 50-day moving average of $51.68 with high-volume. Look for volume on that move that registers close to or above its three-month average volume of 2.3 million shares. If we get that move, then look for FAST to make a run at its recent high of $55.05 a share.

I would avoid FAST or look for short biased trades if the stock fails to get back above its 50-day, and then drops below some near-term support at $48.83 a share with high-volume. Target a drop towards $44 to $42 a share or possibly lower if the bears spark a big selloff in FAST post-earnings.

Fastenal, one of 9 Stocks That Prove Dividends Make All the Difference, also shows up on a list of 10 Stocks Leading the Way in the Housing Recovery.

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