The current short interest as a percentage of the float for Thor Industries stands at 10.6%. That means that out of the 50.09 million shares in the tradable float, 4.74 million shares are sold short by the bears. If this company can give the bulls the earnings news they're looking for, then this stock could see a sharp short-covering rally post-earnings.

From a technical perspective, THO is currently trending above its 200-day moving average and just below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways for the last month, with shares moving between $36.30 on the downside and $38.60 on the upside. A high-volume move above the upper-end of that range could trigger a major breakout trade for shares of THO post-earnings.

If you're in the bull camp on THO, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 50-day moving average of $39.16 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 720,585 shares. If that breakout triggers, then THO will set up to re-test or possibly take out its next major overhead resistance levels at $41 to $42 a share. Any high-volume move above $42 will then put $43 to $44.28 into range for shares of THO.

I would simply avoid THO 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 at $36.30 a share with high volume. If we get that move, then THO will set up to re-test or possibly take out its next major support levels at $34.16 to its 200-day at $33.72 a share.

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.


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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.

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