Zillow

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Another potential earnings short-squeeze candidate is online real estate information provider Zillow ( Z), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Zillow to report revenue of $31.47 million on earnings of 0 cents per share.

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If you're looking for a heavily shorted stock that's trending strong heading into its quarterly report, then make sure to check out shares of Zillow. This stock is up 48% during the last three months, and it's currently trading about 10 points off its 52-week high of $46.86 a share.

The current short interest as a percentage of the float for Zillow is extremely high at 40.6%. That means that out of the 18.72 million shares in the tradable float, 8.33 million shares are sold short by the bears. If the bulls get the earnings news they're looking for, then this stock could easily explode higher post-earnings.

From a technical perspective, Z 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 three months, with shares soaring higher from its low of $23 to its recent high of $38.17 a share. During that uptrend, shares of Z have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of Z within range of triggering a near-term breakout trade post-earnings.

If you're bullish on Z, 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 $38.17 to $38.41 a share and then once it clears more resistance at $39.20 to $39.42 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 647,810 shares. If that breakout triggers, then Z will set up to re-test or possibly take out its next major overhead resistance levels at $42.82 to $46.86 a share.

I would avoid Z or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 200-day moving average at $35.63 a share and below $34.51 a share with high volume. If we get that move, then Z will set up to re-test or possibly take out its 50-day moving average at $31.33 a share.

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