Look for the trend from the 2nd to 12th candlesticks on the 30min chart. I did not include the 1st and 13th candlesticks because that is when there is too much noise (volatility) in the market (especially for a stock that is reporting earnings). So they don't paint the real picture of the day. If the trend is up for the day, then expect a positive reaction to earnings - bullish. If down, expect a negative reaction - bearish. If flat, then check whether it is an up or down day based on where it opened and where it is about 5mins before the market closes. It should NOT be based on previous day's close. So it can be down for the day based on Friday's close but up based on where it opened (and vice versa). I'm interested in the latter. Note that this puts the odds significantly in my favor but is no guarantee.
What if it is flat from the 2nd to 12th candlestick, and also flat for the day based on the open and 5mins before the close? It means you should stay away whether it is up or down for the day (due to an opening gap).
Based on that comment, the trend today (from 2nd to 12th candlestick) is flat. I guess the market was not going to make it easy for me. So the next step is to see if it is up or down for the day (from the open). It opened at 451.69, and it is right now at 453.15. I will check about 5mins before the close to see where it is. If it is >451.69 I will buy October Call option. But even if it is <451.69 I will still buy the Call option. So being >451.69 at that time is just to make me feel good (not really) for a few minutes before the report, as it will further confirm my bullish bias.
The reasons I'm confidently bullish at this time are:
1) Fundamentals are bullish.
2) The technicals have been confirmed bullish with the Inverse Head and Shoulder (IHS) today (see chart below). Though the daily chart posted over the weekend showed both bullish and bearish trends, today's intraday IHS gives the advantage of the technicals to the bulls.
3) The trend from the 2nd to 12th candlestick is not down. That would have frustrated me. I know the trend is not up as well. The fact that it is flat means I can either ignore it and focus on other bullish factors or I can be biased and look at it as good for the bulls. Doesn't matter.
4) It is higher now (453.15) than when it opened (451.69).
Note that there is no guarantee. I am only trying to put the odds in my favor as much as I can. It is now left for the company to decide. I did my homework. My conscience is now clear (I wish).
