I would avoid TFM 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 $45 a share with high volume. If we get that move, then TFM will set up to re-test or possibly take out its next major support levels at $42.85 to its 50-day moving average at $42.31 a share.


My final earnings short-squeeze play is specialty retailer of branded footwear and accessories DSW ( DSW), which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect DSW to report revenue of $588.81 million on earnings of 90 cents per share.

This company has topped Wall Street estimates three times in the past four quarters. The current short interest as a percentage of the float for DSW stands at 6.6%. That means that out of the 34.94 million shares in the tradable float, 2.18 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 6.3%, or by about 137,000 shares. If the bears are caught pressing their bets into a bullish quarter, then shares of DSW could easily rip higher post-earnings.

From a technical perspective, DSW 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 month, with shares moving higher from its low of $63.15 to its recent high of $70.78 a share. During that uptrend, shares of DSW have been mostly making higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of DSW within range of triggering a near-term breakout trade.

If you're in the bull camp on DSW, 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 $70.78 a share and then once it takes out its 52-week high at $72 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 497,553 shares. If that breakout triggers, then DSW will set up to enter new 52-week-high territory above $72, which is bullish technical price action. Some possible upside targets off that move are $75 to $80 a share, or even north of $80 a share.

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