Let’s get into the spirit of the season by looking at American Greetings (NYSE: AM), one of the main players in the greeting card world.  Unfortunately, we’re taking a Grinch-like view of the company, which reports on Wednesday before the open.

Analysts expect 71 cents per share, a penny shy of the whisper number.  That’s a red flag right off the bat, since AM has missed six of the past 10 analyst estimates.

Performance after recent reports has been suspect as well.  The past two quarters have seen the shares decline an average of 6.5% in just the one day following these reports.

AM’s chart actually looks decent, with the shares stepping higher over the past three months.  But the pattern of higher highs and higher lows suggest that the current pullback from the high a week ago is about half of the two previous declines.  Thus the shares may have some more downside before resuming the uptrend.

Sentiment toward AM is mixed.  Short interest is very high, while the put/call ratio is on the low side.   The stock has no Zacks analyst rank.  So we’re not seeing anything here to alter our short-term pessimistic view.

With AM’s spotty record of beating analyst estimates, recent poor post-earnings performance, and a chart that suggests some continued weakness, we’re looking for the stock to slide after earnings.  Buy the January 2011 22.50 Put for $1.50 or less to leverage the expected weakness.

Have a great trading week and an even better holiday.