Another potential earnings short-squeeze play is retail food and drug chain Safeway ( SWY), which is set to release its numbers on Thursday before the market open. Wall Street analysts, on average, expect Safeway to report revenue of $10.24 billion on earnings of 46 cents per share. Goldman Sachs recently said that shares of Safeway continue to be at a trough and short interest remains at its highest. The firm thinks the muted results and low expectations may cause a short-squeeze. >>5 Rocket Stocks to Buy in October The current short interest as a percentage of the float for Safeway is extremely high at 30.9%. That means that out of the 237.92 million shares in the tradable float, 70.11 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 5.1%, or by about 3.53 million shares. If the shorts are caught pressing too hard into this quarter, then we could see a large short-squeeze develop post-earnings. From a technical perspective, SWY is currently trading above its 50-day moving average and below its 200-day moving average, which is neutral trendwise. This stock has been trending sideways for the past month and change, with shares moving between $15.50 on the downside and around $17 on the upside. A move outside of that trading range post-earnings will likely setup the next major trend for SWY. If you're in the bull camp on SWY, then I would wait until after its report and look for long-biased trades if this stock can manage to break out above some past overhead resistance levels at $16.74 to $16.92 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 7 million shares. If SWY triggers that breakout, then this stock will have a great chance of re-testing or possibly taking out its next major overhead resistance levels at its 200-day at $18.61 and at $19.11 a share. This stock could even hit $22 to $23 if those levels get taken out with volume. I would simply avoid SWY or look for short-biased trades if after earnings this stock fails to trigger that breakout and then drops back below some key near-term support at $15.86 to $15.50 a share with high volume. If we get that move, then SWY will setup to re-test or possibly take out its next major support levels at $14.74 to $14.58 a share post-earnings. Any move below $14.58 will push SWY into new 52-week-low territory, which would be bearish technical price action.