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Surviving Oracle in an Amazon World

NEW YORK ( TheStreet) -- When the dust settled after the closing bell on Thursday, Oracle (ORCL - Get Report) shed $15 billion in market valuation from the closing on Wednesday. If you're ready to break the glass and push the panic button, hold off until you read this, I just might change your mind.

Oracle consistently beats market expectations, as you can see by reviewing the results over the last 12 or more quarters. Still, surpassing analyst estimates doesn't ensure any given stock will rise after earnings releases and Oracle has a history of post-earnings release weakness that I pointed out with my Oracle earnings preview .

In the third paragraph, I hit the nail on the head:
We don't predict the future, we predict the odds. Chances are, within days after a beat, Oracle's shares will tank. An upward path throughout 2013 should eventually follow. In the interim, there is money to be made.

I also believed that Oracle would beat on earnings and while I could argue adjusting for onetime expenses makes sense, it doesn't matter. What matters to investors is the stock reaction and I feel confident that a 9.8% one-day drop qualifies as tanking. Of course shareholders need to get through Friday and Monday, but you should expect the storm clouds to pass and the sun to shine again.

Regardless if Oracle beats or misses, the first few days after a release brings a lower stock price. There isn't a lot about Wall Street that is consistent when it comes to predicting price action, but Oracle after earnings is starting to appear as the exception to the rule.

If it's true that Oracle is not only a relatively consistent profit maker, but also a relatively consistent stock, then it's time to look back to December 2011. If you're a new Oracle investor and thought Thursday was a tough day, 2011 was a rough Christmas for many shareholders.

Shares dropped well over 10% and took over a month before Oracle's shares once again closed higher than the day before the earnings release. Today, it's hard to say how much lower Oracle shares can go, but technical analysis shows strong support just under $32 a share.

The current widely followed 200-day moving average is about $31.97 and even if the price breaches below that level, it will likely push back. Even with newer technology nipping at Oracle's heels, the Redwood City company has demonstrated a strong push toward adjusting to the needs of customers.
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