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.

Ctrip.com

My first earnings short-squeeze play is China-based travel services provider 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 $655.45 million on a loss of 21 cents per share.

The current short interest as a percentage of the float for Ctrip.com is pretty high at 10.9%. That means that out of the 335.30 million shares in the tradable float, 36.76 million shares are sold short by the bears.

From a technical perspective, Ctrip.com is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last three months, with shares moving higher off its low of $37.36 a share to its recent high of $47.85 a share. During that uptrend, shares of Ctrip.com have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a big breakout trade post-earnings.

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 key overhead resistance levels at $47.85 to $49.33 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 4.85 million 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 $55.60 to its 52-week high of $57.36 a share.

I would simply 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 at $46 a share to its 20-day moving average of $45.43 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 its 200-day moving average of $44.32 a share to its 50-day moving average of $43.23 a share, or even $40 a share.

Veeva Systems

Another potential earnings short-squeeze play is health care information services player Veeva Systems  (VEEV - Get Report) , which is set to release numbers on Tuesday after the market close. Wall Street analysts, on average, expect Veeva Systems to report revenue $126.57 million on earnings of 13 cents per share.

The current short interest as a percentage of the float for Veeva Systems is pretty high at 10%. That means that out of the 85.59 million shares in the tradable float, 8.62 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 1.6%, or by about 136,000 shares. If the bears get caught pressing their bets into a strong 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, Veeva Systems is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last six months, with shares moving higher off its low of $23.88 a share to its recent high of $39.93 a share. During that uptrend, shares of Veeva Systems have been consistently making higher lows and higher highs, which is bullish technical price action. That move has now pushed this stock within range of triggering a big breakout trade post-earnings.

If you're in the bull camp on Veeva Systems, 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 at its 52-week high of $39.93 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.53 million shares. If that breakout fires off post-earnings, then this stock will set up to enter new 52-week-high territory, which is bullish technical price action. Some possible upside targets off that move are $44.30 to its all-time high of $49 a share.

I would simply avoid Veeva Systems or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 20-day moving average of $38.76 a share to its 50-day moving average of $36.98 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 $34 to $32.62, or even its 200-day moving average of $29.41 a share.

G-III Apparel Group

Another potential earnings short-squeeze candidate is men's and women's apparel player G-III Apparel Group  (GIII - Get Report) , which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect G-III Apparel Group to report revenue of $484.85 million on earnings of 18 cents per share.

The current short interest as a percentage of the float for G-III Apparel Group is pretty high at 11.2%. That means that out of the 41.04 million shares in the tradable float, 4.61 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 4%, or by about 176,000 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 scramble to cover some of their positions.

From a technical perspective, G-III Apparel Group is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last month, with shares moving higher off its low of $38.30 a share to its recent high of $44.85 a share. During that uptrend, shares of G-III Apparel Group have been making mostly higher lows and higher highs, which is bullish technical price action. That uptrend has now pushed this stock within range of triggering a near-term breakout trade post-earnings.

If you're bullish on G-III Apparel Group, 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 $41.76 a share to some more key overhead resistance levels at $44.85 to its 200-day moving average of $45.56 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 591,152 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 $50 to $52 a share.

I would avoid G-III Apparel Group 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 $40 to $39.37 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 $38.30 to its 52-week low of $36.14 a share.

Golar LNG

Another earnings short-squeeze prospect is shipping player Golar LNG  (GLNG - Get Report) , which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Golar LNG to report revenue of $22.99 million on a loss of 50 cents per share.

The current short interest as a percentage of the float for Golar LNG is very high at 16%. That means that out of 86.55 million shares in the tradable float, 13.90 million shares are sold short by the bear.

From a technical perspective, Golar LNG is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending over the last two months, with shares moving higher off its low of $14.32 a share to its recent high of $21.25 a share. During that uptrend, shares of Golar LNG have been making mostly higher lows and higher highs, which is bullish technical price action. That strong uptrend has now pushed this stock within range of triggering a big breakout trade post-earnings.

If you're bullish 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 some key overhead resistance levels at $21.25 to just above $22 a share with high volume. Look for volume on that move that hits near or above its three-month average volume of 1.86 million 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 $24.60 to $27 a share.

I would simply avoid Golar LNG or look for short-biased trades if after earnings it fails to trigger that breakout and then drops back below its 20-day moving average of $19.35 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 its 200-day moving average of $18.10 a share to its 50-day moving average of $17.61, or even $16 to $15 a share.

Box

My final earnings short-squeeze trading opportunity is application software player Box  (BOX - Get Report) , which is set to release numbers on Wednesday after the market close. Wall Street analysts, on average, expect Box to report revenue of $94.65 million on a loss of 19 cents per share.

The current short interest as a percentage of the float for Box is extremely high at 23.4%. That means that out of the 43.56 million shares in the tradable float, 10.23 million shares are sold short by the bears.

From a technical perspective, Box is currently trending above both its 50-day and 200-day moving averages, which is bullish. This stock has been uptrending strong over the last two months, with shares moving higher off its low of $9.86 a share to its recent high of $13.49 a share. During that uptrend, shares of Box have been consistently making 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 Box 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 $13.25 to $13.50 a share with high volume. Look for volume on that move that hits near or above its three-month average action of 949,550 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 $14.40 to its 52-week high of $14.80, or even $17 to $19 a share.

I would avoid Box or look for short-biased trades if after earnings it fails to trigger that breakout, and then drops back below its 20-day moving average of $12.60 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 its 200-day moving average of $11.98 a share to its 50-day moving average of $11.49, or even $11 to $10.50 a share.

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