Elevated Short Interest Sets the Stage for Post-Earnings Upside.

Lockheed Martin (LMT) is scheduled to report earnings tomorrow, July 22nd, before the market open.

The stock has remained essentially flat over the past week. Although pre-earnings momentum has a historical pattern with post-earning price change, there has been no notable movement pre-earnings this time.

Historically, changes in short interest have been positively correlated with post-earnings returns. Heading into this report, short interest has increased.

This serves as a bullish indicator, as short sellers have often misjudged this name. We anticipate an upward move in LMT post-earnings.

LMT is generally viewed as a low-risk stock, with an average post-earnings move of ±2.8%. However, options are currently pricing in a ±4% move, signaling heightened expectations.

RTX is also scheduled to report earnings tomorrow before the open.

Like LMT, RTX has traded flat over the past week, which makes the typical pre-earnings reversal pattern less applicable.

For RTX, rising short interest ahead of earnings has historically signaled positive post-earnings returns—similar to the pattern observed in LMT. Short interest has increased this week, reinforcing a bullish setup.

Based on historical behavior, this is a bullish signal for RTX.

In summary, both LMT and RTX are considered low-risk names with historically modest price reactions around earnings—movements that are generally in line with current options market expectations.

RTX short interest is at a recent high.

LMT short interest is at a recent high.

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