Note that playing earnings is always an aggressive move no matter how wonderful the fundamentals and technicals look. So I will be risking 100% in the trades.
GOOGL:
Though it missed 3 of its last 4 earnings (but fell/gapped down in two), it looks decent for this report. Based on its fundamentals, I will give it a score of 8 or 9 out of 10. On the technical side, currently at 590.57, it wants to go to 630 or 650 (see my charts). So the fundamentals and technicals favor the upside.
I will be buying September Call options (I would have preferred October but it is not available at this time). I believe this is enough time to try to get back my money (and more) if it goes against me (as long as SPX stays bullish).
An alternative will be to play Strangles or Straddles i.e buying both Call and Put options given that GOOGL tends to move a lot after earnings. It limit the risk (and profit). But I don't think I will go with that.
SLB:
Looks very good going into the report. On the fundamental side, I will give it a score of 9 or 10 out of 10. It looks really solid. Also of note is the fact that it beat estimates in the last 10 earnings/quarters. On the technical side, currently at 115.88, it is setup for an upside target of 126-128 (see my charts). So the fundamentals and technicals favor the upside.
I will be buying November Call options (I would have preferred October or September but there are not available at this time). This is more than enough time for damage control and profit if the report goes against me.
The problem with SLB is that it doesn't move much when it reports. So playing Strangles or Straddles is out of the question i.e buying both Call and Put options. The benefit with that (low volatility) however is the fact that you can risk holding your positions going into earnings without sustaining massive damage to your portfolio if things go against you.
Another added benefit to SLB going into earnings is the fact that XLE (the major energy sector ETF) looks good for a run up (see my chart). Schlumberger owns 8% of XLE making it the third largest holder (behind Exxon Mobil and Chevron). So even if it reports bad earnings, the energy sector will help it out by putting a floor for the downside and push it back up. "A rising tide lifts all boats."
GOOG-DAILY
SLB-WEEKLY
SLB-DAILY
SLB-15MIN
XLE-DAILY
SPX-DAILY V
SPX-DAILY IV
SPX-DAILY III
SPX-DAILY II
SPX-DAILY I
SPX-30MIN
SPY-15MIN
