Hain Celestial Group

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

Get Adobe Flash player

My first earnings short-squeeze trade idea is natural and organic products maker Hain Celestial Group ( HAIN), which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Hain Celestial Group to report revenue of $473.44 million on earnings of 69 cents per share.

This company has beaten Wall Street estimates for the last four quarters and is coming off a quarter in which it beat estimates by 1 cent, reporting net income of 40 cents per share vs. a mean estimate of 39 cents per share. Hain Celestial Group has averaged year-over-year revenue growth of 25.5% over the last four quarters.

>>5 Bargain Stocks to Play the Resurgent U.S. Consumer

The current short interest as a percentage of the float for Hain Celestial Group is rather high at 11.9%. That means that out of the 37.53 million shares in the tradable float, 5.34 million shares are sold short by the bears. Any bullish earnings news could easily spark a solid short-covering rally for HAIN post-earnings.

From a technical perspective, HAIN is currently trending above its 50-day moving average and just below its 200-day moving average, which is neutral trendwise. This stock has been uptrending slightly over the last month, with shares moving higher from its low of $51.51 to its recent high of $58.76 a share. During that uptrend, shares of HAIN have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of HAIN within range of triggering a near-term breakout trade post-earnings.

If you're bullish on HAIN, 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 at $58.76 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 814,568 shares. If that breakout triggers, then HAIN will set up to re-test or possibly take out its next major overhead resistance levels at $62 to $62.40 a share. Any high-volume move above $62.40 will then put $64 to $66 into focus for shares of HAIN.

I would simply avoid HAIN or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 50-day moving average of $56.49 a share with heavy volume. If we get that move, then HAIN will set up to re-test or possibly take out its next major support levels at $53.44 to $51.51 a share. If those levels get taken out with volume, then HAIN could hit $49.63 a share or lower post-earnings.

If you liked this article you might like

Hain Celestial: Cramer's Top Takeaways

Stay Focused on the Green Lights: Cramer's 'Mad Money' Recap (Wed 8/30/17)

Put Down That Cup of Tea and Check Out Hain Celestial

Put Down That Cup of Tea and Check Out Hain Celestial

Whole Foods Will Pummel Amazon's Profits, a Lot