The truth is that you don't have to observe anything. Allow the child to enjoy the book corner. When children are permitted to have time looking at books on their own, they will tell themselves the story from memory. They might add to or subtract from it according to their own tastes, memory, mood, what is on their mind, what is troubling them, how they want the story to be.
Children may also take a book that has not as yet been read to them, and tell themselves about the book / story according to the pictures. In this way, they have the opportunity to develop their imagination and creative thinking and also to increase their memory skills.
Although they will not be formally reading, this too is an important aspect of enabling a child to learn and to appreciate and enjoy books.