Casey's General Stores

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A potential earnings short-squeeze trade in the retail grocery complex is Casey's General Stores ( CASY), which is set to release its numbers on Tuesday after the market close. This company, together with its subsidiaries, operates convenience stores under the Casey's General Store, HandiMart and Just Diesel names in 11 Midwestern states, primarily Iowa, Missouri, and Illinois. Wall Street analysts, on average, expect Casey's General Stores to report revenue of $1.74 billion on earnings of 67 cents per share.

If you're looking for a stock that's trending very strong heading into its earrings report this week, then make a sure to check out shares of Casey's General Stores. During the last six months, shares of Casey's General Stores are up over 20%, and the stock is current trading just a point off its 52-week high of $60.60 a share.

The current short interest as a percentage of the float for Casey's General Stores is notable at 5.8%. That means that out of the 37.81 million shares in the tradable float, 2.19 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 11.4%, or by about 224,000 shares.

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From a technical perspective, CASY 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, with shares soaring from a low of $46.84 to a recent high of $60.60 a share. During that uptrend, shares of CASY have consistently made higher lows and higher highs, which is bullish technical price action. That move has how pushed CASY within range of triggering a major breakout post-earnings.

If you're bullish on CASY, I would wait until after they report and look for long-biased trades if this stock can manage to trigger a break out above $60.60 a share with high-volume. Look for volume on that move that registers near or above its three-month average action of 239,328 shares. If we get that move, then CASY could easily trade north of $65 a share post-earnings.

I would simply avoid CASY or look for short-biased trades if after earnings this stock fails to trigger that breakout, and then drops below some near-term support at $58.50 a share with heavy volume. If we get that action, then look for CASY to re-test and possibly take out its 50-day moving average of $56.75 a share.

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