Over the past three days, it has dropped about 10%. Fundamentally it is 4 - 4.5 out of 10 (bearish). In the past seven quarters, it beat earnings five times, missed once and in line once. It also beat revenue five times out of the seven. So my fundamental score and its earnings performance do not line up. But given that my focus is on the score, I will consider FNSR bearish.
Technically, it has both bullish and bearish setups. Four days ago it was bearish. But given the recent drop, I no longer consider it bearish (neither is it bullish).
So based on the technicals and fundamentals, if it was reporting four days ago, I would definitely have taken a Put position. But the story is different now.
What is my "reason with me" plan?
I will buy October Calls for the following reasons:
1) It has dropped too much (about 10%) the past three days. This tells me it can't go that much lower if it misses (no guarantee though). But if it beats, a huge move up is to be expected.
2) It tends to gap opposite the trend going into earnings. (This is another reason I would have been bearish if it was reporting four days ago.)
3) The company is not as bad as the market is making it looks. It usually beats revenue with double digits. So there is cash coming in. It is also a profitable company. It is not like they are losing money or heading towards bankruptcy. And the future looks bright for the company. Relatively speaking, the stock is cheap based on its fundamentals and
