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Watch for JCPenney Short Squeeze After-Hours

Ahead of JCPenney earnings, which will be released Tuesday after the bell, top Citi analyst Deborah Weinswig has words of caution for anyone who's short.

It won't take much to generate a short squeeze.

JCPenney has come under the microscope over the past several months after Ron Johnson, the visionary behind Apple’s retail strategy, took the corner office at the department store.

Johnson has been transforming everything about the company from prices to what it keeps in stock and the store experience.

Perhaps, his riskiest move is his three-tier price strategy that eliminates hundreds of sales events in favor of more predictable prices.

The three pricing levels are everyday prices that are about 40 percent less than initial prices of a year ago, deeper promotions that last a month and clearance events the first and third Friday of each month.

Lately, investors have started to question whether Johnson’s strategy is working.

"I think the new pricing strategy is a flawed strategy," says trader Stephen Weiss. “Although I can’t tell you what the quarter will be, I can tell you the turnaround doesn't seem to be working."

Weiss is short.

And as we said above, Weiss is among those money pros that could be in for splash of cold water.

"Yes, there are concerns about the top line -- and concerns about the bottom line -- and concerns Johnson takes down guidance,” says Weinswing.

“However, if Ron Johnson says one positive thing -- and I think it only has to be one-- I think we see a short squeeze.

In other words, so much is stacked against JCP, Weinswig doesn't think it will take much to send shorts running for the exits.

What do you think? We want to know!

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Posted by CNBC's Lee Brodie

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Trader disclosure: On May 15, 2012 , the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Stephen Weiss is long AIG; Stephen Weiss is long JPM; Stephen Weiss is long VZ; Stephen Weiss is long WLP; Stephen Weiss is long NAV; Stephen Weiss is long HK; Stephen Weiss is short CHK; Stephen Weiss is short JCP; Stephen Weiss is short JEC; Brian Kelly is long T; Brian Kelly is long VZ; Brian Kelly is long KRE; Brian Kelly is long WFC; Brian Kelly is long USG; Steven Grasso is long ASTM; Steven Grasso is long AVAV; Steven Grasso is long BA; Steven Grasso is long D; Steven Grasso is long FRO; Steven Grasso is long LNG; Steven Grasso is long MHY; Steven Grasso is long NUAN; Steven Grasso is long MO; Steven Grasso is long PFE; Steven Grasso is long S; Steven Grasso is long XLU; Steven Grasso is long ZAZA

For Jon Najarian
Jon Najarian is long call spreads DMND
Jon Najarian is long call spreads AH
Jon Najarian is long call spreads NFLX
Jon Najarian is long call spreads VALE
Jon Najarian is long call spreads V
Jon Najarian is long call spreads MAKO
Jon Najarian is long call spreads GRPN
Jon Najarian is long call spreads GM
Jon Najarian is long GLUU
Jon Najarian is long CIGX
Jon Najarian is long DDMD
Jon Najarian is long CME
Jon Najarian is long CBOE

For Alan Rifkin
Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from HD
Barclays Bank PLC and/or an affiliate has received compensation for investment banking services from LOW
Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from HD
Barclays Bank PLC and/or an affiliate has received non-investment banking related compensation from LOW
Company has been an investment banking client of Barclays: HD
Company has been an investment banking client of Barclays: LOW
Company has been a non-investment banking client of Barclays: HD
Company has been a non-investment banking client of Barclays: LOW

For Deborah Weinswig
Citigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of JCP
Ciitigroup Global Markets Inc. or its affiliates beneficially owns 1% or more of any class of common equity securities of TGT



CNBC.com with wires.