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.

Short-squeeze candidates are something that I tweet about on a regular basis. These are also the exact type of stocks that I love to trade and alert to my subscribers in real-time.

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.

Clarcor

My first earnings short-squeeze play is pollution and treatment controls player Clarcor  (CLC) , which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Clarcor to report revenue $356.29 million on earnings of 68 cents per share.

The current short interest as a percentage of the float for Clarcor is notable at 4%. That means that out of the 48.17 million shares in the tradable float, 1.96 million shares are sold short by the bears.

From a technical perspective, Clarcor is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last few weeks, with shares moving higher off its low of $54.78 a share to its recent high of $61.55 a share. During that uptrend, this stock has been making mostly higher lows and higher highs, which is bullish technical price action. That move has now pushed shares of Clarcor within range of triggering a big breakout trade post-earnings.

If you're bullish on Clarcor, 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 $61.55 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 263,756 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 $65.91 to $67.21 a share. Any high-volume move above those levels will then give this stock a chance to trend north of $70 a share.

I would simply avoid Clarcor or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below both its 20-day moving average of $58.92 a share and its 50-day moving average of $58.18 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 $54.78 to its 200-day moving average of $51.84, or even $49 a share.

Qunar Cayman Islands

Another potential earnings short-squeeze trade idea is China-based online travel platform operator Qunar Cayman Islands  (QUNR) , which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Qunar Cayman Islands to report revenue $1.13 billion on a loss of $2.51 per share.

The current short interest as a percentage of the float for Qunar Cayman Islands is pretty high at 9.8%. That means that out of the 43.71 million shares in the tradable float, 4.29 million shares are sold short by the bears. If this company can produce the earnings news the bulls are looking for, then shares of Qunar Cayman Islands could easily rip sharply higher post-earnings as the bears scramble to cover some of their positions.

From a technical perspective, Qunar Cayman Islands is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last two months, with shares falling off its high of $44.64 a share to its recent low of $28.04 a share. During that downtrend, shares of Qunar Cayman Islands have been making mostly lower highs and lower lows, which is bearish technical price action.

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 above some near-term overhead resistance levels at $30 to its 20-day moving average of $31.88 a share and then above more resistance at $32 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 364,283 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 $35.79 to its 50-day moving average of $37.28, or even its 200-day moving average of $38.91 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 some near-term support levels at $28.04 a share to its 52-week low of $26.52 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.

Ctrip.com

Another potential earnings short-squeeze candidate is China-based travel services player Ctrip.com  (CTRP - Get Report) , which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Ctrip.com to report revenue of $4.14 billion on a loss of $3.62 per share.

The current short interest as a percentage of the float for Ctrip.com is pretty high at 9.7%. That means that out of the 342.28 million shares in the tradable float, 33.47 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 2.6%, or by about 837,000 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 rush to cover some of their positions.

From a technical perspective, Ctrip.com is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been downtrending over the last few weeks, with shares moving lower off its high of $46.67 a share to its recent low of $39.02 a share. During that downtrend, shares of Ctrip.com have been making mostly lower highs and lower lows, which is bearish technical price action.

If you're bullish on Ctrip.com, 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 $41 to $42 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 4.82 million shares. If that breakout takes hold post-earnings, then this stock will set up to re-test or possibly take out its next major overhead resistance levels at its 200-day moving average of $42.78 to its 50-day moving average of $45.54 a share. Any high-volume move above those levels will then give this stock a chance to tag $47 to $49 a share.

I would avoid Ctrip.com or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below some near-term support levels $39.02 to $38.40 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 $35.50 to $30 a share.

Bob Evans Farms

Another earnings short-squeeze prospect is full-service restaurants player Bob Evans Farms  (BOBE) , which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Bob Evans Farms to report revenue of $345.26 million on earnings of 43 cents per share.

The current short interest as a percentage of the float for Bob Evans Farms is pretty high at 13.1%. That means that out of 16.34 million shares in the tradable float, 2.14 million shares are sold short by the bear.

From a technical perspective, Bob Evans Farms is currently trending above both its 200-day moving average and below its 50-day moving average, which is neutral trendwise. This stock has been trending sideways over the last three months and change, with shares moving between $43.28 on the downside and $47.87 on the upside. Any high-volume move above the upper-end of this recent sideways trending chart pattern post-earnings could trigger a big breakout trade for shares of Bob Evans Farms.

If you're bullish on Bob Evans Farms, 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 $45.88 to $47 a share and then above $47.73 to $47.87 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 220,138 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 $50.40 to $55 a share.

I would simply avoid Bob Evans Farms 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 $43.28 a share to its 200-day moving average of $42.75 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 $40 to $38, or even $37.71 to $36 a share.

Kroger

My final earnings short-squeeze trading opportunity is grocery stores operator Kroger  (KR - Get Report) , which is set to release numbers on Thursday before the market open. Wall Street analysts, on average, expect Kroger to report revenue of $34.88 billion on earnings of 69 cents per share.

The current short interest as a percentage of the float for Kroger stands at 3.2%. That means that out of the 956.98 million shares in the tradable float, 31.20 million shares are sold short by the bears.

From a technical perspective, Kroger is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending a bit over the last few weeks, with shares moving higher off its low $33.62 a share to its recent high of $37 a share. During that uptrend, shares of Kroger 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 in the bull camp on Kroger 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 $37 to its 200-day moving average of $37.50 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 7.29 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 $39.10 to $41, ore even $43 a share.

I would avoid Kroger or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below some near-term support levels at $35 to $33.62 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 $31.04 to $27.08 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.