Trading Strategies For Oracle Stock Before And After Q4 Earnings

Oracle Corporation ORCL gapped up about 4% to start Monday’s trading session and was rising an additional 1.5% into blue skies intraday. The company is set to print its fourth-quarter financial results after the markets close.

Analysts expect the company to report EPS of $1.58 on revenues of $13.73 billion for the quarter ending March 31.

On Monday, Evercore ISI Group analyst Kirk Materne maintained an In-Line rating on Oracle and raised the price target from $95 to $110. Wolf Research analyst Alex Zukin upgraded the stock from Peer Perform to Outperform and announced a $130 price target.

When Oracle printed its third-quarter earnings report on March 9, the stock dropped 3.22% the following day before printing a triple bottom pattern near the $82 level between March 13 and March 16, where Oracle reversed course into a steep and long-term uptrend.

For that quarter, Oracle reported earnings per share of $1.22, beating a Street estimate of $1.20 per share. The company posted a top-line miss, reporting revenues of $12.398 billion compared to the $12.42-billion consensus estimate.

From a technical perspective, Oracle looks mixed heading into the event, trading in a strong uptrend but in need of a pullback. Of course, holding a position in a stock over earnings can be akin to gambling, as stocks can rise following an earnings miss and fall after reporting a beat.

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The Oracle Chart: Oracle started trading in an uptrend on March 16 and has made a fairly consistent series of higher highs and higher lows. The stock’s most recent higher low was formed on May 24 at $97.29 and the most recent confirmed higher high was printed at the $103.10 mark on May 22.

• If Oracle closes near its high-of-day on Monday, the stock will print a bullish kicker candlestick, which could indicate higher prices will come again on Tuesday. If the stock closes the trading session with an upper wick, Oracle will form a shooting star candlestick, which could suggest lower prices are in the cards.
• If Oracle trades higher on Tuesday, the stock is likely to retrace, at least to print another higher low over the next few days because its relative strength index is measuring in at about 81%. When a stock’s RSI exceeds the 70% level it becomes overbought, which can be a sell signal for technical traders.
• The stock is also likely to pull back soon because it hasn’t printed a higher low in 12 trading days. The lower gap created on Monday also makes it likely a retracement will occur. When that happens, the stock may bounce up from the lower range of the gap.
• Oracle has psychological resistance above at $120 and $125 and support below at $106.34 and $103.10.