Short-sellers hate being caught short a stock that reports a blowout quarter. When this happens, we often see a tradable short squeeze develop as the bears rush to cover their positions to avoid big losses. Even the best short-sellers know that it's never a great idea to stay short once a bullish earnings report sparks a big short-covering rally.

This is why I scan the market for heavily shorted stocks that are about to report earnings. You only need to find a few of these stocks in a year to help enhance your portfolio returns -- the gains become so outsized in such a short time frame that your profits add up quickly.

That said, let's not forget that stocks are heavily shorted for a reason, so you have to use trading discipline and sound money management when playing earnings short-squeeze candidates. It's important that you don't go betting the farm on these plays and that you manage your risk accordingly. Sometimes the best play is to wait for the stock to break out following the report before you jump in to profit off a short squeeze. This way, you're letting the trend emerge after the market has digested all of the news.

Of course, sometimes the stock is going to be in such high demand that you risk missing a lot of the move by waiting. That's why it can be worth betting prior to the report -- but only if the stock is acting very bullish technically and you have a very strong conviction that it is going to rip higher. Just remember that even when you have that conviction and have done your due diligence, the stock can still get hammered if Wall Street doesn't like the numbers or guidance.

If you do decide to bet ahead of a quarter, then you might want to use options to limit your capital exposure. Heavily shorted stocks are usually the names that make the biggest post-earnings moves and have the most volatility. I personally prefer to wait until all the earnings-related news is out for a heavily shorted stock and then jump in and trade the prevailing trend.

With that in mind, let's take a look at several stocks that could experience big short squeezes when they report earnings this week.

Deere

My first earnings short-squeeze play is farm and construction machinery maker Deere  (DE - Get Report) , which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Deere & Company to report revenue of $6.13 billion on earnings of 75 cents per share.

The current short interest as a percentage of the float for Deere & Company is pretty high at 11.9%. That means that out of the 297.21 million shares in the tradable float, 35.56 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 3.8%, or by about 1.29 million shares. If the bears get caught pressing their bets into a strong quarter, then this stock could easily soar sharply higher post-earnings as the bears move fast to cover some of their positions.

From a technical perspective, Deere & Company is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been trending sideways and consolidating over the last two months, with shares moving between $71.85 on the downside and $81.46 on the upside. Shares of Deere & Company are now trending just above the lower-end of its recent sideways trending chart pattern and within range of triggering a big breakout trade post-earnings.

If you're bullish on Deere & Company, 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 its 20-day moving average of $76.33 a share and its 50-day moving average of $76.81 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 3.72 million shares. If that breakout triggers post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $80.51 to $81.50, or even close to $85 a share.

I would simply avoid Deere & Company 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 $73.10 to its 52-week low of $71.85 a share with high volume. If we get that move, then this stock will set up to enter new 52-week-low territory, which is bearish technical price action.

Qunar Cayman Islands

Another potential earnings short-squeeze trading opportunity is China-based online travel platform operator Qunar Cayman Islands  (QUNR) , which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Qunar Cayman Islands to report revenue $1.19 billion on a loss of $5.48 per share.

The current short interest as a percentage of the float for Qunar Cayman Islands is extremely high at 27.5%. That means that out of the 24.27 million shares in the tradable float, 9.64 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 17.6%, or by about 1.44 million shares. If the bears get caught pressing their bets into a bullish quarter, then this stock could easily rip sharply higher post-earnings as the bears move fast to cover some of their positions.

From a technical perspective, Qunar Cayman Islands is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has recently started to bounce higher off its 50-day moving average and back above its 200-day moving average. That bounce is now quickly pushing shares of Qunar Cayman Islands within range of triggering a major breakout trade above some key near-term overhead resistance levels post-earnings.

If you're in the bull camp on Qunar Cayman Islands, 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 $42.36 to $43 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 2.38 million shares. If that breakout gets started post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $50 to $50.50 or even $52.50 to $54 a share.

I would simply avoid Qunar Cayman Islands or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 50-day moving average of $37.21 a share to more near-term support at $34.65 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at $30 to $27.50 a share.

Jiayuan.com

Another potential earnings short-squeeze candidate is China-based online dating platform operator Jiayuan.com (DATE) , which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Jiayuan.com to report revenue of $28.31 million on earnings of 10 cents per share.

The current short interest as a percentage of the float for Jiayuan.com is notable at 8%. That means that out of the 5.54 million shares in the tradable float, 447,000 shares are sold short by the bears. If this company can deliver the earnings news the bulls are looking for, then shares of Jiayuan.com could easily rip sharply higher post-earnings as the bears move fast to cover some of their positions.

From a technical perspective, Jiayuan.com is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending a bit over the last three months, with shares moving higher off its low of $5.30 to its recent high of $6.96 a share. During that uptrend, shares of Jiayuan.com have been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a near-term breakout trade post-earnings.

If you're bullish on Jiayuan.com, then I would wait until after its report and look for long-biased trades if this stock manages to break out above some key near-term overhead resistance levels at $6.96 to $7.25 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 103,317 shares. If that breakout fires off post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $7.79 to $8.50, or even $9 to $9.50 a share.

I would avoid Jiayuan.com or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below both its 50-day moving average of $6.49 to its 200-day moving average of $6.18 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at $6 to $5.72, or even $5.30 a share.

Guess

Another earnings short-squeeze prospect is apparel stores player Guess  (GES - Get Report) , which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Guess' to report revenue of $521.03 million on earnings of 11 cents per share.

The current short interest as a percentage of the float for Guess' is very high at 17%. That means that out of 64.31 million shares in the tradable float, 10.95 million shares are sold short by the bear. This stock sports a high short-interest and a relatively low tradable float. Any bullish earnings news could easily spark a large short-squeeze for shares of Guess' post-earnings that sends the bears scrambling to cover some of their positions.

From a technical perspective, Guess' is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending badly over the last two months, with shares falling sharply lower from its high of $23.45 to its recent low of $17.83 a share. During that downtrend, shares of Guess' have been making mostly lower highs and lower lows, which is bearish technical price action. That said, this stock has now started to rebound off that $17.83 low and it's beginning to trend within range of triggering a near-term breakout trade post-earnings.

If you're bullish on Guess', then I would wait until after its report and look for long-biased trades if this stock manages to break out above both its 200-day moving average of $19.78 and its 20-day moving average of $20.29 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.21 million shares. If that breakout materializes post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 50-day moving average of $21.33 to $22, or even $23 to $23.50 a share.

I would simply avoid Guess' or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some key support levels at $17.93 to $16.92 a share and then below its 52-week low of $16.61 a share with high volume. If we get that move, then this stock will set up to enter new 52-week-low territory, which is bearish technical price action.

Golar LNG

My final earnings short-squeeze play is midstream liquefied natural gas player Golar LNG  (GLNG - Get Report) , which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Golar LNG to report revenue of $29.60 million on a loss of 30 cents per share.

The current short interest as a percentage of the float for Golar LNG is pretty high at 12.6%. That means that out of the 191.21 million shares in the tradable float, 24.25 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 486,000 shares. If the bears get caught pressing their bets into a bullish quarter, then this stock could easily spike sharply higher post-earnings as the bears jump to cover some of their trades.

From a technical perspective, Golar LNG is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has recently formed a double bottom chart pattern at $26.77 to $26.73 a share. Shares of Golar LNG are now starting to spike a bit higher above those support levels and it's beginning to trend within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on Golar LNG, then I would wait until after its report and look for long-biased trades if this stock manages to break out above its 20-day moving average of $28.93 a share and its 50-day moving average of $30.13 a share and then above more resistance at $30.85 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 1.37 million shares. If that breakout develops post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at $32.43 to $34.70, or even its 200-day moving average of $36.93 a share.

I would avoid Golar LNG 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 $26.73 to its 52-week low of $25.52 a share with high volume. If we get that move, then this stock will set up to re-test or possibly take out its next major support levels at $22.94 to $20 a share.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.