Gauging the Prospects of an Upcoming Earnings Report

John Hopkins and I have illustrated on many occasions how it's quite possible to predict an upcoming earnings report based upon how a company performs on a relative basis heading into that report.  On July 12th, in the ChartWatchers newsletter at StockCharts.com, John correctly predicted that Cintas Corp (CTAS) would report blowout quarterly results.  He also pointed out that we should avoid Alliance Data Systems (ADS), which has been tumbling of late, down more than 20% in August alone.  How'd he do it?  He simply looked at relative strength.  Wall Street was telling us what to buy and what to avoid.

This evening, a very strong software company will be reporting its latest quarterly results.  While it's difficult to determine how Wall Street might react to the report, I believe there's a very strong chance we're going to see revenues and EPS come in ahead of expectations.  Check out Okta, Inc. (OKTA):