Oracle Corporation (ORCL) stock is trading lower by about 3% on Wednesday morning after the company beat fourth-quarter 2020 profit estimates but came up short on the income. The results have been relatively close to expectations, but shareholders hit their buttons to exit after the company noted that “some” customers in the hospitality, retail, and transportation sectors had postponed a “few” purchases as a result of the coronavirus a pandemic.
The company has guided the first quarter of 2021 (end of August to mid-line of a consensus, but refused to give full-year estimates due to the ongoing crisis. The measures offered are some of the reasons for new investors to jump on board. There is also little motivation for Wall Street to recommend owning new shares, with the current impasse between the eight “Buy” recommendations and 10 “Hold” recommendations are unlikely to change much in either direction.
The enterprise software provider have booted from the Nasdaq 100 index in 2013, even if it has been trading in a 13 years old, to make room for a new generation of high-tech favorites. The title has gained almost 60% over the past seven years, but has not yet reached the elite status of other tech stocks, booking only modest gains for shareholders in the long term. In addition, the increase was blocked from January 2018, with the share price at the addition of two points between then and now.
ORCL’s Long-Term Chart (1990 – 2020)
The stock has entered a strong upward trend, after bottoming out at a split-adjusted 12 cents in 1990, posting impressive gains supported by the World Wide Web and semi-conductor boom. It is divided into five times in the course of the ascent, head to the mid-$40 in 2000. The lower carved with a complex pattern, falling to a three-year low in the third quarter of 2002, while a slow movement of the bounce made little progress through the middle years of the decade.
The rally ended with .386 Fibonacci sale retracement level in 2007, a decline that accelerated during the economic collapse of 2008. The stock has reached the bottom of the barrel, its lowest level since three years, in March 2009, posting a lower than in 2002. The resilience provoked a strong rebound, which has completed a roundtrip in the state of the high at the end of the year. The subsequent breakout have shaken out by whipsaws for several years before reaching the level of 2000 to the end of 2014.
2015 escape made little progress, a ceiling of less than two points above the 2000 high, and an easing in troubled model who has played only two healthy upticks in the last five years. It posted a record $ 60.50 in July 2019 and rolled over, dumping to a three-year low during the first quarter of the pandemic of his fainting. Price action has now retraced about 70% of the decline, which puts the stock at only three points more than in June 2017.
The monthly stochastic oscillator has reached the level of overbought after crossing a buy of the cycle March. There is little resistance against the rising prices with this structure, increasing the chances that he will recover quickly from this morning’s downdraft. However, an 11-year, the increase of the channel should limit the rise if the rally monte the 2019 high, with a resistance is now just above$ 60. That the surge might not be enough to justify the title, in particular with the 1.76% before dividend.
ORCL Short Term Chart (2017 – 2020)
The balance volume (OBV), the accumulation-distribution indicator supports a more optimistic view, the seizure of a gradual accumulation of the phase in June 2018. OBV posted a new high with prices in 2019 and has now risen to an all-time high.
This bullish divergence predicts that the price will soon be playing catch-up, with the potential for a rapid ascent which closes the distance in the 2019 high. Even so, it is logical for sidelined investors to wait for buy signals, which will be developed if the rebound clears the resistance at the .786 Fibonacci sale retracement level at $56 (blue line).
The Bottom Line
Oracle stock is selling off after a poor earnings report, but could easily trade up to 2019 high in the next few weeks.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.