Shares of Oracle (ORCL) - Get Oracle Corporation Report were hit extremely hard on Friday. The software giant fell 4.8% as downside volume surged to its heaviest level on the year.

This damaging earnings-inspired collapse reversed a very strong pre-earnings session and will likely drag shares lower in the near term. Patient Oracle bulls will see lower entry opportunities as a result.

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After failing to reach new 2016 highs after retesting the $42 area in mid-July, Oracle fell into a very narrow consolidation pattern just below the highs. This constructive continued into the first week of September until a jump in volatility hit the stock.

Oracle appeared headed for a downside break on Friday, Aug. 9, after the stock fell below the previous month's low. A quick rebound followed, and by the close of trade before its first-quarter earnings report, the stock had returned to the middle of its range.

Friday's nasty downside break left many of the pre-earnings investors deep in the red. With an ominous monthly double top now in place as well as a second straight lower monthly low, the post-earnings breakdown could just be beginning.

In the near term, Oracle investors should keep a close eye on the $38 area. This important support zone held multiple weekly lows in June, including the Brexit selling wave. A hold near this area would be a big positive. If this area is convincingly taken out, the downside could open up dramatically. There is very little support in place until Oracle returns to the $35 area. Until the stock tests the area of the June lows, Oracle will likely prove to be a painful long.

This article is commentary by an independent contributor. At the time of publication, the author was long ORCL.