Oracle's Charts Show Volatility Is the Norm After Earnings

NEW YORK (TheStreet) -- Technical charts for software giant Oracle (ORCL) - Get Report show how the volatile the company's stock can be after earnings.

The company, which has been focusing more on cloud-based products in recent quarters, is scheduled to report after the closing bell on Tuesday.

Some analysts say that Oracle has been supporting its stock with share- buyback programs for three years and that insiders have been using strength to book profits as the stock traded at an all-time intraday high of $46.70 on Dec. 24. The high was above the stock's Nasdaq bubble peak of $46.46 set in September 2000.

Analysts expect Oracle on Tuesday to report earnings of 64 cents a share for its fiscal third quarter ended in February. The company has missed estimated in three of the last four quarters.

Let's take a look at the performance measures for Oracle, key trading levels and analysis of daily and weekly charts.

Oracle ($42.38 at Friday's close) gained 18% in 2014, and is down 5.8% so far in 2015. The stock is down 9.3% from its all-time intraday high.

Investors looking to buy Oracle after earnings should place a good till canceled limit order to purchase the stock if it drops to $40.04, which is a key level on technical charts until the end of June.

Investors looking to reduce holdings should place a good 'til canceled limit order to sell the stock if it rises to $45.82, which is a key level on technical charts until the end of 2015.

Let's take a look at the daily chart for Oracle.

Courtesy of MetaStock Xenith

The daily chart for Oracle ($42.38) shows that the stock has been trading back and forth around its 200-day simple moving average (green line) for the last 24 months. The price gaps up or down occurred following the company's quarterly earnings reports.

Following an earnings miss reported on June 19, the stock declined 6% from $42.51 to as low as $39.93 on June 20. Then an earnings miss on Sept. 18 was followed by a decline of 14% from $41.55 to as low as $35.82 on Oct. 20. At that low, the stock was below its 200-day simple moving average, which was then at $39.83.

Shares of Oracle climbed back above their 200-day SMA on Nov. 10. On Dec. 17, the company reported better-than-expected earnings, and the stock popped 13% from $41.16 to its all-time high.

As a positive, Oracle shares held their 200-day simple moving average at $41.39 on March 12.

Let's take a look at the weekly chart for Oracle.

Courtesy of MetaStock Xenith

The weekly chart shows that Oracle's 200-week simple moving average (green line) has been on an uptrend since bottoming with the market in March 2009.

As a negative, Oracle shares are below their key weekly moving average (red line) of $43.05, with their momentum reading declining below the overbought threshold of 80.00 at 47.32.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stock mentioned.