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

Get Adobe Flash player

My final earnings short-squeeze trade idea is licensor of 3D technologies RealD ( RLD), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect RealD to report revenue of $47.78 million on a loss of 9 cents per share.

If you're looking for a heavily-shorted stock that's been uptrending strong heading into its quarter, then make sure to check out shares of RLD. This stock has been on fire during the last three months, with shares up a solid 18.7%.

The current short interest as a percentage of the float for RealD is very high at 22%. That means that out of the 39.89 million shares in the tradable float, 9.34 million shares are sold short by the bears. This is another name that's a high short interest low float situation. Any bullish earnings news could easily send the bears scrambling to cover some of their short bets, pushing shares of RLD significantly higher post-earnings.

From a technical perspective, RLD is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong for the last four months, with shares soaring higher from its low of $8.57 to its recent high of $11.74 a share. During that uptrend, shares of RLD have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of RLD within range of triggering a major breakout trade post-earnings.

If you're in the bull camp on RLD, 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 at $11.74 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 326,989 shares. If we get that breakout, then RLD will set up to re-fill some of its previous gap down zone from last August that started near $13 a share. Any high-volume move above $13 will then put $14 to $15.42 into range for shares of RLD.

I would simply avoid RLD or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 200-day at $10.95 and its 50-day at $10.79 a share with high volume. If we get that move, then RLD will set up to re-test or possibly take out its next major support levels at $10.57 to $10.22 a share. Any move below $10.22 will then put $10.13 to $9.80 into focus for shares of RLD.

To see more potential earnings short squeeze plays, check out the Earnings Short Squeeze Plays portfolio on Stockpickr.

-- Written by Roberto Pedone in Winderemere, Fla.


Follow Stockpickr on Twitter and become a fan on Facebook.

At the time of publication, author had no positions in stocks mentioned.

Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on technical analysis for small- and large-cap stocks, options, futures, commodities and currencies. Roberto studied international business at the Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany. His work has appeared on financial outlets including and You can follow Pedone on Twitter at or @zerosum24.

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