Last earnings season, $GOOG sported a massive move to the upside. It was a move many here at optionmillionaires.com were able to capitalize upon. http://www.optionmillionaires.com/goog-960-calls-300-10600-48-hours-trade-options/
Back in April 2007, $GOOG was able to pull a similar move to the upside that resulted in option contracts going from $.50 to $50 overnight. Do we need to wait another 6 years before $GOOG posts another big spike/drop or should we become accustomed to more volatile price action for earnings?
From a technical perspective $GOOG is, in my view, at a crossroads. Last earnings season, $GOOG burst above overhead resistance at two strong levels, which are still acting as significant support. You can see the "Abenomics" trendline that started in November 2012 as current support. Last earnings season, $GOOG was at resistance. This earnings season, it finds itself at support.
A breach of the "Abenomics" line will send $GOOG to $850, where an 8-year support line resides along with the confluence of two other trendlines.
I would not entirely rule out a 10% jump after tomorrow's earnings report, but let's keep in mind that it spiked higher during the last earnings season. A great earnings report could send $GOOG to $1250.
Where do I see $GOOG heading Thursday night?
I don't see the stock moving more than 5% to the upside, and with current market sentiment in a decline a 10-15% move lower isn't out of the question.
Therefore, the best chance to make a big profit post-earnings will be to purchase some far-out-of-the-money puts.
Because the market is expecting a $65 move, roughly, the options for $GOOG are very expensive. If the $940 puts come down to .30 - .35 I'll get in the trade for earnings. If not, I'll watch from the sidelines.