One other thing that can be looked at is the performance of the sector or industry the stock belongs to. Sometimes there could be momentum in all the stocks, sometimes not for many reasons.
Chart reading along could be enough to gain insights if the trade holding period or capital allocation is less, if the holding period is long or capital is big, reading about the fundamentals and knowing market’s view for the individual stock or the sector helps.
And if the earnings beat market’s estimates price can go much higher, or lower if earnings are reported less.
Are you talking about FnO stocks alone or all stocks?
Check the charts. How the price moved in realation to the nearest support and resistance. If it is facing resistance and results expectancy is positive…then probability of breakout is higher.
Where as , if price goes one way up in entire month ( SBI case ) , then probability of profit booking rises. And the operators select times like results and news , so that they can get maximum liquidity and or volume.
If you are allocating big capital, taking fewer trades, and if the holding period is long, then I think it is better to know about the business along with looking at the charts. Because investors who follow the business build positions continuously, much before the changes in the business bring in the profits. A lot of investors follow valuation models, some don’t mind buying at higher prices than their average because the business will be profitable in the future too, so while the volume may not look high, price increases.
Look at any significant price movement at different price levels, along with volumes, which signifies a buildup for good results. Check monthly charts for more insights.
For traditional sectors, with long history, unless there is a significant change in the business, like capacity expansion, going to new geographies, launching new products, the profits and margins are known to the market.
Sometimes there could be strong momentum across the board in sectors, commodity type businesses like sugar, cement, metals etc, and here momentum is clearly seen because of tailwinds. So experienced traders take bigger bets for a few quarters. Sometimes sector rotation happens like with pharma or real estate. So price moves even further up after the results, because the profitability will continue.
So a lot of moving parts of investing present with trading too, as we are taking delivery.