Oracle Corp. (ORCL) is soaring this morning after solid fiscal fourth-quarter results and robust guidance, as the cloud push drives gains for the company. ORCL is the Stock of the Day at Real Money. Let's check out the charts and indicators Thursday with ORCL around $56 in early trading.
In the daily bar chart of ORCL, below, we can see that prices corrected in the fourth quarter of 2018 before rebounding sharply this year until late April. Prices made another correction in May to test the rising 200-day moving average line. ORCL bounced in early June to fail again around the declining 50-day moving average line.
The daily On-Balance-Volume (OBV) line shows weakness from May to June signaling more aggressive selling and the Moving Average Convergence Divergence (MACD) oscillator crossed below the zero line in May for an outright sell signal. The bearish alignment of these indicators makes Thursday price strength a bit surprising, but that is what makes the stock market exciting.
In the weekly bar chart of ORCL, below, we can see how prices were weakening on this time frame. ORCL tested the rising 40-week moving average line and bounced.
The weekly OBV line showed weakness and the MACD oscillator crossed to a take profits sell signal.
In this close only Point and Figure chart of ORCL, below, we can see an upside price projection of near $80. A high/low chart of ORCL still gives a downside price target. A closing trade at $55.80 Thursday will be a breakout.
Bottom-line strategy: It is interesting, at least to me, that a well-followed company like Oracle was giving us bearish technical signals so close to its earnings release. If ORCL can close above $56 I will respect the strength and recommend the long side risking a close below $52 -- the recent low.