DreamWorks Animation reports earnings next Tuesday. I am considering stalking it for a long entry after the initial reaction. Quite a few investors I know who are geared towards fundamentals think the stick remains undervalued here. Technically, the weekly RSI (top pane below) needs to hold above 50 to really create a bull divergence. But there is no denying that the stock has experienced less and less downside momentum despite its inability to bounce.

You are also talking about a very heavily-shorted stock, which begs the question of whether the savvy shorts have already started to lock in gains after a sharp plunge since 2010.

If you have a take on this stock, feel free to chime in below in my comments section.

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