Another potential earnings short-squeeze trade idea is small-loan consumer finance player World Acceptance (WRLD), which is set to release its numbers on Tuesday before the market open. Wall Street analysts, on average, expect World Acceptance to report revenue $153.47 million on earnings of $2 per share.
The current short interest as a percentage of the float for World Acceptance is extremely high at 39%. That means that out of the 8.45 million shares in the tradable float, 4.04 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 7%, or by about 264,000 shares. If the bears get caught pressing their bets into a strong quarter, then shares of WRLD could skyrocket sharply higher post-earnings as the shorts rush to cover some of their bets.
From a technical perspective, WRLD is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways for the last three months, with shares moving between $84.22 on the downside and $93.71 on the upside. Any high-volume move above the upper-end of its recent range post-earnings could easily trigger a major breakout trade for shares of WRLD.
If you're in the bull camp on WRLD, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 200-day moving average of $89.33 a share to some more key overhead resistance levels at $91.35 to $93.71 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 158,056 shares. If that breakout hits, then WRLD will set up to re-fill some of its previous gap-down-day zone from last November that started at $105 a share.
I would simply avoid WRLD 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 levels at $85.23 to $84.22 a share with high volume. If we get that move, then WRLD will set up to re-test or possibly take out its next major support levels at $82.10 to $79.25 a share. Any high-volume move below those levels will then put its next major support level at $75.12 a share into range for shares of WRLD.