Oracle (ORCL) broke out of a sideways trading range in late February and gaped to the upside earlier this month. What's next for ORCL? A quick resumption of the rally or are prices extended and need a period of consolidation?
Let's check the latest charts and indicators to see if anything has changed from our previous look, where we concluded that "the latest gains in ORCL are just a continuation of the rally that was already underway. The long side remains attractive as long as $42 is not broken. The $57 to $60 area is our upside price objective."
In this daily bar chart of ORCL, above, we can see a $38 to $42 trading range for much of the past 12 months. In January ORCL started a rally that did not stall or peter out at $42. ORCL moved above the rising 50- and 200-day moving averages in late January. In late February the 50-day moving average crossed above the 200-day average line for a bullish golden cross buy signal.
It is often said that volume precedes price, and the On-Balance-Volume (OBV) line turns up in early November ahead of the price improvement. In the bottom panel is the 12-day momentum study which shows equal highs in February and March versus higher price highs from ORCL. This difference is a bearish divergence, but it is not for a long period of time, so I do not anticipate that it a significant bearish signal.
In this updated weekly chart of ORCL, above, we see the continuation of the rally up from base pattern with a "neckline" at $42. Prices soared to $47 and have pulled back slightly. The MACD oscillator is still bullish, as is the weekly OBV line.
In this updated Point and Figure chart of ORCL we can see the breakout trade at $46 and the next price target of $57.
Bottom line: I would continue to trade ORCL from the long side but raise sell stop protection to $43.