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Oracle  (ORCL) - Get Free Report is preparing to report fiscal-second-quarter earnings on Thursday – and it’s all about the cloud.

In the cloud wars in Silicon Valley and on Wall Street, the Redwood Shores, Calif., database major has been in catch-up mode.

Cloud market share has been a major catalyst for stock-price upside in recent years.  (AMZN) - Get Free Report and Microsoft  (MSFT) - Get Free Report have captured an estimated 62% of the cloud market, and in the process have delivered triple-digit stock-price returns since 2017.

Oracle has a consistent track record of besting analyst earnings expectations: The company has posted positive earnings surprises for each quarter of the past three years.

But that hasn’t translated into quite the same outperformance in the share price, in large part because of Wall Street’s fixation on cloud growth compared with those bigger peers.

For the latest quarter, analysts are estimating Oracle earned 89 cents a share.

The good news for Oracle bulls is that this big stock is showing some signs of a positive earnings reaction this week.

To figure out what’s going on – and how to trade it – we’re turning to the chart for a technical look.

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At a glance, it's clear that Oracle’s second-half trajectory is attractive. Since mid-August, the shares have been holding onto a well-defined up trend, catching a bid at every test of trend-line support along the way.

The shares’ most recent test of their trend line came earlier this month and was met with buying pressure right on cue. That’s an important sign of strength from buyers heading into earnings.

Among notable stocks that have posted big earnings misses this quarter, we’ve seen a number of trend violations ahead of the earnings calls. 

The fact that Oracle is actively bouncing off support here suggests that buyers are very much in control of things.

Oracle’s technical setup means the shares are predisposed to a positive earnings reaction. Still, earnings risk always comes with uncertainty – Oracle being more likely to react positively to earnings isn’t the same thing as a guaranteed move higher.

For that reason, the strategy here is to wait for the shares' initial reaction to the earnings before trading. 

As long as Oracle remains in its price channel, this tech stock looks like a solid long as the shares continue to march higher within their up trend.

If you already own Oracle, the line in the sand to keep an eye on is the 200-day moving average, which has acted like a near-perfect proxy for trend line support all year long. 

Even if Oracle stumbles a bit post-earnings, if the shares hold above the 50-day, it’s a buy-the-dips stock.