Bank of the Ozarks

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Another earnings short-squeeze play is Bank of the Ozarks ( OZRK), which is set to release numbers on Wednesday after the market close. This company provides a range of retail and commercial banking services as well as mortgage lending and corporate cash management services. Wall Street analysts, on average, expect Bank of the Ozarks to report revenue of $60.97 million on earnings of 55 cents per share.

The current short interest as a percentage of the float for Bank of the Ozarks is rather high at 10.8%. That means that out of the 29.87 million shares in the tradable float, 3.28 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then we could easily see a decent short-covering rally develop post-earnings.

From a technical perspective, OZRK is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending for the last two months, with shares moving higher from its low of $30.76 to its recent high of $34.75 a share. During that uptrend, shares of OZRK have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed OZRK within range of triggering a breakout trade post-earnings.

If you're bullish on OZRK, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some near-term overhead resistance levels at $34.75 to $34.98 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 137,434 shares. If that breakout triggers, then OZRK will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that breakout are $40 to $43 a share.

I would avoid OZRK or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some key near-term support levels at $33.42 to its 50-day at $32.76 a share with heavy volume. If we get that move, then OZRK will set up to re-test or possibly take out its next major support levels at $32.25 to its 200-day at $31.69 a share.

If you liked this article you might like

Ironwood Shares Jump on FDA Approval for Hyperuricemia Drug - Biotech Movers

5 Ways Allergan Can Keep Up Momentum

Premarket Biotech Movers: Ironwood Pharmaceuticals, Rigel Pharmaceuticals, FibroGen

Synergy Pharmaceuticals Secures Approval for Linzess Competitor

Ironwood Pharmaceuticals (IRWD): Today's Weak On High Volume Stock