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.

BlackBerry

My first earnings short-squeeze play is smartphone developer BlackBerry (BBRY) , which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect BlackBerry to report revenue of $331.92 million on a loss of 1 cent per share.

The current short interest as a percentage of the float for BlackBerry is pretty high at 10.5%. That means that out of the 520.29 million shares in the tradable float, 54.65 million shares are sold short by the bears.

From a technical perspective, BlackBerry 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 $6.93 a share to its recent high of $7.93 a share. During that uptrend, shares of BlackBerry 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 BlackBerry, 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 $7.93 to $8.10 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 4.26 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 $8.50 to its 52-week high of $9.46 a share.

I would simply avoid BlackBerry 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 $7.45 a share to its 200-day moving average of $7.37 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 $6.93 to $6.60, or even $6.35 to its 52-week low of $6.23 a share.

Lindsay

Another potential earnings short-squeeze trade idea is industrial goods player Lindsay (LNN - Get Report) , which is set to release numbers on Wednesday before the market open. Wall Street analysts, on average, expect Lindsay to report revenue of $119.04 million on earnings of 61 cents per share.

The current short interest as a percentage of the float for Lindsay is extremely high at 24.7%. That means that out of the 10.29 million shares in the tradable float, 2.54 million shares are sold short by the bears.

From a technical perspective, Lindsay 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 $68.85 a share to its recent high of $89.98 a share. During that uptrend, shares of Lindsay have been making mostly higher lows and higher highs, which is bullish technical price action. This uptrend has now pushed this stock within range of triggering a big breakout trade post-earnings above some key overhead resistance levels.

If you're in the bull camp on Lindsay, 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 its 52-week high of $89.98 a share to some past resistance at $90.41 a share with high volume. Look for volume on that move that registers near or above its three-month average volume of 113,564 shares. If that breakout materializes 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 breakout are $95 to $100, or even $105 to $110 a share.

I would simply avoid Lindsay 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 $85.02 a share to some more near-term support at $84 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 50-day moving average of $80.17 a share to $77, or even $75 to its 200-day moving average of $73.37 a share.

Calavo Growers

Another potential earnings short-squeeze candidate is farm products player Calavo Growers (CVGW - Get Report) , which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect Calavo Growers to report revenue of $226.55 million on earnings of 48 cents per share.

The current short interest as a percentage of the float for Calavo Growers is pretty high at 12%. That means that out of the 15.41 million shares in the tradable float, 1.85 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 101.3%, or by about 932,000 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 scramble to cover some of their positions.

From a technical perspective, Calavo Growers is currently trending below both its 50-day and 200-day moving averages, which is bearish. This stock has been uptrending over the last few weeks, with shares moving higher off its low of $51.40 a share to its recent high of $59.25 a share. During that uptrend, shares of Calavo Growers have been making mostly higher lows and higher highs, which is bullish technical price action.

If you're bullish on Calavo Growers, 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 $59.25 to its 50-day moving average of $59.71 a share and then above its 200-day moving average of $60.33 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 199,172 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 $65 to $67.50, or even $70 to $70.50 a share.

I would avoid Calavo Growers 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 $56.91 a share to some more near-term support levels at $55 to $54 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 $51.40 to its 52-week low of $46.56 a share.

CarMax

Another earnings short-squeeze prospect is used vehicles retailer CarMax (KMX - Get Report) , which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect CarMax to report revenue of $3.75 billion on earnings of 70 cents per share.

The current short interest as a percentage of the float for CarMax is rather high at 14.6%. That means that out of 189.19 million shares in the tradable float, 27.62 million shares are sold short by the bear.

From a technical perspective, CarMax 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 $47.50 a share to its recent high of $64.88 a share. During that uptrend, shares of CarMax have been making mostly higher lows and higher highs, which is bullish technical price action. That strong uptrend has now pushed shares of CarMax within range of triggering a near-term breakout trade post-earnings.

If you're bullish on CarMax, 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 $64 to its 52-week high of $64.88 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 2.36 million shares. If that breakout takes hold 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 breakout are $68 to $70, or even $74 to $75 a share.

I would simply avoid CarMax 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 $60.13 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 50-day moving average of $55.11 a share to its 200-day moving average of $53.93 a share, or even $52 to $51 a share.

FactSet Research Systems

My final earnings short-squeeze trading opportunity is technology player FactSet Research Systems (FDS - Get Report) , which is set to release numbers on Tuesday before the market open. Wall Street analysts, on average, expect FactSet Research Systems to report revenue of $289.38 million on earnings of $1.70 per share.

The current short interest as a percentage of the float for FactSet Research Systems stands at 7.9%. That means that out of the 39.08 million shares in the tradable float, 3.10 million shares are sold short by the bears. The bears have also been increasing their bets from the last reporting period by 10.8%, or by about 303,000 shares. If the bears get caught pressing their bets into a strong quarter, then this stock could easily spike sharply higher post-earnings as the bears move quickly to cover some of their trades.

From a technical perspective, FactSet Research Systems 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 $150.48 a share to its recent high of $168.22 a share. During that uptrend, shares of FactSet Research Systems have been making mostly higher lows and higher highs, which is bullish technical price action. That trend has now pushed the stock within range of triggering a big breakout trade post-earnings above some near-term overhead resistance levels.

If you're in the bull camp on FactSet Research Systems 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 $168.22 to its gap-down-day high from September at around $170 a share with high volume. Look for volume on that move that registers near or above its three-month average action of 386,769 shares. If that breakout hits post-earnings, then this stock will set up to re-fill some of its previous gap-down-day zone that started near $178 a share. If that gap gets filled with volume, this stock could even tag $180 to $182, or its 52-week high of $183.17 a share.

I would avoid FactSet Research Systems 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 $162.86 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 $160.36 a share to its 50-day moving average of $158.65 a share, or even $154 to $150 a share.

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