Greenhill

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Another earnings short-squeeze candidate is independent investment banking player Greenhill ( GHL), which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Greenhill to report revenue of $102.10 million on earnings of 68 cents per share.

The current short interest as a percentage of the float for Greenhill is pretty high at 11.5%. That means that out of the 25.99 million shares in the tradable float, 2.95 million shares are sold short by the bears. This is a decent short interest on a stock with a relatively low tradable float. If Greenhill gives the bulls what they're looking for, then this stock could easily squeeze the shorts post-earnings.

From a technical perspective, GHL is currently trending above its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been uptrending relatively strong for the last few weeks, with shares moving higher off its 200-day moving average of $49.06 to its recent high of $54.58 a share. During that uptrend, shares of GHL have been consistently making higher lows and higher highs, which is bullish technical price action.

That move has now pushed shares of GHL within range of triggering a near-term breakout trade post-earnings.

If you're bullish on GHL, 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 $54.58 a share and then once it clears its 50-day at $57.08 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 273,000 shares. If we get that breakout, then GHL will set up to re-test or possibly take out its next major overhead resistance levels at $60.84 to $61.52 a share. If those levels get taken out with volume, then GHL could hit $65 after earnings.

I would avoid GHL 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 $52 to $51.56 a share with high volume. If we get that move, then GHL will set up to re-test or possibly take out its next major support levels $50 to $49.23 a share. Any high-volume move below those levels will then put $46 into range for shares of GHL.

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