Oracle Stock Hits Record on Earnings - Here's the Trade

Oracle stock is a bit higher after beating earnings and revenue expectations. What do the charts say about the outlook?
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Oracle  (ORCL) - Get Report shares gapped higher by almost 6% on Friday morning and rallied as much as 7.9% after the Redwood City, Calif., software major reported earnings.

The shares briefly touched records - and the shares then retreated. The stock is now up 2% as investors wonder where it can go from here. 

For it to continue higher, investors need to see a catalyst.

Oracle beat on earnings and revenue expectations, powered by strength in the cloud. 

If investors believe that momentum can continue, perhaps they'll push the shares higher. Analysts seem to think it's possible

Morning Bell With Jim Cramer: Watch Oracle

The company is also making a run at TikTok, even if investors think that Microsoft  (MSFT) - Get Report and Walmart  (WMT) - Get Report have a better shot at closing that deal. Until we know more, let's look at the charts. 

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Trading Oracle Stock

Daily chart of Oracle stock.

Daily chart of Oracle stock.

Earlier this month, Oracle stock made a push higher, ultimately (but barely) breaking out to new highs. 

That happened when it cleared the prior all-time high from July 10, 2019, at $59.19 (on a dividend-adjusted basis).

However, this level acted as resistance earlier this month, sending the shares back down to the 20-day and 50-day moving averages, as well as uptrend support.

With Friday’s fade, the stock is back below the key $59 area. Because of it, though, the setup is a bit simpler.

Bulls can be long over $59.50, with the post-earnings high of $62.50 as their first upside target. Above that puts the 138.2% extension in play near $66.70, then the 161.8% extension near $71.

On the downside, bulls can look to buy the dip between $55.50 and $56.50, depending on how aggressive they want to be. There they will find the 20-day and 50-day moving averages, and uptrend support.

Below that zone and $54 is in play, along with the 200-day moving average. Finally, should all of these levels give way, $51 support is on the table.

Here’s the bottom line: If Oracle stock can reclaim its key breakout spot, bulls will want to be long. If it can’t, they need to wait for a deeper dip.