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. Even the best short-sellers know, 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 every week to help enhance your portfolio returns.

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

Ambarella

My first earnings short-squeeze play is semiconductor player Ambarella (AMBA - Get Report) , which is set to release numbers Tuesday after the market close. Wall Street analysts, on average, expect Ambarella to report revenue of $86.07 million on earnings of 74 cents per share.

The current short interest as a percentage of the float for Ambarella is very high, at 19.9%. That means that out of the 31.70 million shares in the tradable float, 6.32 million shares are sold short by the bears.

I would wait until after Ambarella reports, and then look for long-biased trades if this stock manages to break out above some near-term resistance at 60.04 to $62 a share with volume that hits near or above 959,032 shares. If that breakout hits post-earnings, this stock will set up to re-test or possibly take out its next major overhead resistance levels at $66 to $70, or even $72 a share.

Diplomat Pharmacy

Another potential earnings short-squeeze trade idea is health care player Diplomat Pharmacy (DPLO - Get Report) , which is set to release numbers Tuesday after the market close. Wall Street analysts, on average, expect Diplomat Pharmacy to report revenue of $1.18 billion on earnings of 17 cents per share.

The current short interest as a percentage of the float for Diplomat Pharmacy is pretty high, at 13.6%. This means, out of the 61.51 million shares in the tradable float, 8.42 million shares are sold short by the bears.

I would wait until after Diplomat Pharmacy reports, then look for long-biased trades, if this stock manages to break out above some near-term resistance at $15.05 to $16.16 a share with volume that hits near or above 1.09 million shares. If that breakout triggers post-earnings, this stock will set up to re-fill some of its previous gap-down-day zone from last November that started near $23 a share.

Taser International

Another potential earnings short-squeeze candidate is defense-products player Taser International (TASR) , which is set to release numbers Tuesday after the market close. Wall Street analysts, on average, expect Taser International to report revenue of $71.90 million on earnings of 11 cents per share.

The current short interest as a percentage of the float for Taser International is extremely high, at 20.3%. This means, out of the 51.20 million shares in the tradable float, 10.43 million shares are sold short by the bears.

I would wait until after Taser International reports, then look for long-biased trades, if this stock manages to break out above its 20-day at $26.27 a share and then above more resistance at $27.56 a share with volume that hits near or above 729,210 shares. If that breakout develops post-earnings, this stock will set up to re-test or possibly take out its next major overhead resistance levels at $29, to its 52-week high of $30.15 a share, or even $33 to $34 a share.

Valeant Pharmaceuticals

Another earnings short-squeeze prospect is health care player Valeant Pharmaceuticals (VRX) , which is set to release numbers Tuesday before the market open. Wall Street analysts, on average, expect Valeant Pharmaceuticals to report revenue of $2.34 billion on earnings of $1.21 per share.

The current short interest as a percentage of the float for Valeant Pharmaceuticals is rather high, at 11.6%. This means that out of 304.84 million shares in the tradable float, 35.60 million shares are sold short by the bear.

I would wait until after Valeant Pharmaceuticals reports, and then look for long-biased trades if this stock manages to break out above some near-term resistance levels at $17.14 to $17.60 with volume near or above 14.56 million shares. If that breakout fires off post-earnings, this stock will set up to re-test or possibly take out its next major overhead resistance levels at $18.70 to $20, or even its 200-day moving average of $21.28 a share.

Shake Shack

My final earnings short-squeeze play is specialty-eatery player Shake Shack (SHAK - Get Report) , which is set to release numbers Wednesday after the market close. Wall Street analysts, on average, expect Shake Shack to report revenue of $70.68 million on earnings of 9 cents per share.

The current short interest as a percentage of the float for Shake Shack is extremely high, at 43.1%. That means, out of the 17.88 million shares in the tradable float, 7.71 million shares are sold short by the bears.

I would wait until after Shake Shack reports, then look for long-biased trades if this stock manages to break out above some near-term resistance levels at $37 to $37.65 a share with volume near or above 697,206 shares. If that breakout materializes post-earnings, this stock will set up to re-test or possibly take out its next major overhead resistance levels at $39.70 to $42, or even $42.94, to its 52-week high of $43.99 a share.

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