Chart of the Week: Oracle
This week we’re going to be focusing on big tech name, Oracle, one of the former four horsemen. Back in the day, Oracle, Microsoft, Intel, and Cisco were the four big horsemen. Obviously those names have changed today. But Oracle is still a presence and is still doing some great work, especially in the database and AI area.
Oracle had a really super nice run back in the spring and the summertime up to near all-time highs. And we can see here at the last earnings report that came out in September, the stock juts got drilled, from the mid-$120s all the way down close to $102-105 just in a couple of sessions on some pretty heavy turnover. You can see the volume over here.
The name has been in an uptrend
The stock kind of meandered sideways to lower for about two months. And it looks like it made a bottom at $100-101 towards the end of October. And since then it’s been making a nice series of higher highs and higher lows. We call that the definition of an uptrend.
See the dots down under here, which is the parabolic SAR. It’s called the parabolic stop and reverse. That has turned bullish from the beginning of November.
We are above all the relevant moving averages now. We just went above the 200 day moving average; peaked above it yesterday and are significantly higher today. 100 day moving average and 20 day moving average are just starting to move upwards.
As far as the indicators are concerned, rate of change, which is in the third pane over here, has started to roll over here. It’s only rolling over because the stock is slowing down from the torrential run it’s been on since the end of October. So the stock is really charging higher. And you can see the inflection in the rate of change from the end of October all the way up to middle of the month here. So it is rolling over a little bit. I’m not too worried about the rate of change rolling over.
I’m much more concerned that the Chaikin Money Flow is starting to show its strength here. It’s almost up to above the zero line; once it gets above the zero line, it’ll be on a buy signal.
And the other momentum indicator we like to use is the MACD. That went across positive at the beginning of November and has been making new highs as well.
I do like Oracle here. They do have earnings coming out in the middle/towards the end of December. I think this time around it may be a different story, but the fact of the matter is they blew it on earnings last time around, and that should definitely be a warning flag.
Candles are also bullish
We do see the candles have turned to light blue, which is strongly bullish. It’s moved from pink to amber to teal, all the way to light blue, which means it has moved from bearish to neutral to modestly bullish for a couple of days and then to blue. We can see what happened the last time it went from teal to blue. The stock had a nice run right up into earnings, about 8-9% over a period of seven, eight days. So that was a nice run here.
It might be a good stock to get into – to run up towards the old highs up to about $124-125, that would be about a good 7-8% run from current prices.
I have some calls in the Explosive Options service. If you’re interested in learning a little bit more about that, go to our Directional Trading Service page on explosiveoptions.net.
We did post a nice winner on Oracle earlier in the year. And we’re hoping to post another one as well. So that’s Oracle; ORCL is the symbol.
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