As Trulia Soars, Is Zillow Ripe for a Short Squeeze?

Shares of Zillow

traded up over nine percent early Wednesday ahead of the company's earnings report. Fundamentally, there was little specific news to explain the move in Zillow. Shares were likely seeing a pop in line with Trulia

, another real estate website. Trulia reported earnings Tuesday night that were actually weaker than expected. The company posted an adjusted loss of $0.03 -- analysts had only been expecting a $0.02 loss. However, revenue was a bit better than expected at $18.5 million, more than the $17.02 million estimate. In addition, the company upped its guidance. Now, Trulia guides first quarter sales $20.8-21.2 million, more than the $19.20 million estimate. Trulia's subscriptions and traffic were up significantly over the last year. Shares of Trulia were up nearly 24% early Wednesday. Zillow is set to report earnings after the bell. If the company's results are as impressive as Trulia's, then traders might anticipate a powerful rally in the after-hours session. Roughly 36% of Zillow's shares are sold short. An impressive earnings report could send shorts scrambling to cover. Shares of Zillow traded near $39 on Wednesday, while Trulia shares were near $29.