Chewy Inc (NYSE:CHWY) stock picked up momentum on Monday. The company announced Friday that it would replace Stericycle Inc (NASDAQ:SRCL) in the S&P MidCap 400, effective before the opening of trading on Wednesday, November 6.

S&P 500's Waste Management Inc (NYSE:WM) will acquire Stericycle in a deal, pending final closing conditions.

Goldman Sachs has pinpointed 20 stocks, including Chewy, with high short interest that could be poised for a short squeeze if upcoming earnings surpass expectations, presenting trading opportunities.

Also Read: Chewy Insider Penalized by SEC for Trading on Confidential Pet Insurance Deal Info

Analyst John Marshall and his team noted that continued short-covering could drive substantial gains for these stocks. Goldman's analysts also mentioned that heavily shorted stocks frequently experience "relief rallies" around earnings, where better-than-expected results boost share prices by easing bearish sentiment.

In October, meme stock trader Keith Gill, also known as "Roaring Kitty," exited his position in the online pet retailer. According to the 13G filing with the SEC, Gill sold his entire stake in Chewy. The filing indicates Gill had a 0% stake in the pet retailer as of September 30.

Chewy reported second-quarter sales of $2.86 billion, up 2.6%, versus the consensus of $2.86 billion and the management guidance of $2.84 billion–$2.86 billion.

Net Sales Per Active Customer increased 6.2% to $565. Chewy forecasts third-quarter sales of $2.84 billion–$2.86 billion, up by 3%-4% versus the consensus of $2.87 billion.

Chewy stock gained over 21% year-to-date. Investors can gain exposure to the stock through Amplify Online Retail ETF (NYSE:IBUY) and ProShares Online Retail ETF (NYSE:ONLN)

Price Action: CHWY stock is up 5.90% at $28.72 premarket at last check Monday.

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Image via Chewy