Information technology giant Oracle (ORCL) is trading lower Friday on the heels of an earnings disappointment and a downgrade by a fundamental sell-side analyst. Let's check on the damage to the charts and indicators.
In this daily bar chart of ORCL, below, we can see that prices are still in a downtrend after a quick reversal from a spike higher in December. ORCL is trading below the declining 50-day moving average line and the cresting 200-day line. The On-Balance-Volume (OBV) line has been in a decline since October and tells me that sellers of ORCL have been more aggressive on both strength and weakness. The Moving Average Convergence Divergence (MACD) oscillator has only signaled cover shorts buy signals.
In this weekly Japanese candlestick chart of ORCL, below, we can see some recent lower shadows telling us that traders are rejecting the lows. The OBV line has edged up in February and the MACD oscillator has narrowed slightly.
In this daily Point and Figure chart of ORCL, below, we can see a downside price target in the $67 area. A trade at $80 may start to turn this chart around.
In this weekly Point and Figure chart of ORCL, below, we can also see a $67 price target. A trade at $83 may be needed to improve this chart.
Bottom line strategy: We were bullish in our March 9, 2021 review, but this March, a year on, the outlook is bearish. ORCL needs to build a new base and a retest of the late February low is likely to be the first in a number of steps to make a new base. Avoid the long side for now.
