Oracle’s Chart Shows Bullish Signs Ahead of EarningsSoftware giant Oracle NYSE:ORCL , the hyper-scaling competitor in the artificial-intelligence race, plans to report fiscal Q4 numbers next Wednesday (June 11) after the bell. Let’s check out what it’s chart and fundamentals show heading into earnings.
Oracle’s Fundamental Analysis
You know how to tell that earnings season is just about complete? Just wait for ORCL to report, as it’s usually among the last of the Big Tech names to release numbers.
For the three months ended in May, Wall Street is looking for Oracle to report $1.64 of adjusted earnings per share on $15.58 billion of revenue.
If realized, those numbers would translate into 9% year-over-year revenue growth from the same period last year, along with a 0.6% improvement over the year-ago quarter’s $1.63 in adjusted EPS.
That said, all of the 24 sell-side analysts I could find that cover Oracle have revised their earnings estimates for the quarter downward since the period began.
But beyond the headline numbers, some investors might be watching for Oracle’s cloud revenues and cloud-infrastructure sales even more closely.
After all, while Oracle’s total revenues rose just 6.4% year over year in Q3, total cloud revenues grew 23%. Meanwhile, cloud-infrastructure sales gained a whopping 49% during Q3.
Oracle’s Technical Analysis
Now let’s look at ORCL’s chart:
Readers will see that Oracle is still in the final stages of completing a so-called “inverse head-and-shoulders pattern” that stretched from late February to the present, as marked with the purple curved lines above.
This pattern has a so-called “pivot” or “neckline” that runs through the $163 level vs. the $173.87 ORCL’s was trading at midday Friday.
Traders more often than not see an inverse head-and-shoulders pattern as bullish, and that's not all that appears technically positive for Oracle in the above chart.
The stock’s Relative Strength Index (the gray line at the chart’s top) has just started to scratch what can be seen as technically overbought territory, but Oracle has retaken its 200-day Simple Moving Average (or “SMA,” marked with a red line above).
This happened in just the past few days, after the stock hit some resistance at the 200-day line.
The 200-day SMA is key here because it’s the one moving average above all others that typically forces portfolio managers to increase or decrease long-side exposure -- often under pressure from their risk managers.
Meanwhile, Oracle’s retake of the 200-day SMA also came after a mid-May crossover by the stock's 21-day Exponential Moving Average (or “EMA,” marked with a green line) over ORCL’s 50-day SMA (the blue line above).
That’s traditionally a bullish sign that technicians refer to as either a “mini golden cross” or “swing traders' golden cross.”
There's even more technical positivity in the above chart if you look at the stock's daily Moving Average Convergence Divergence indicator (or “MACD,” marked with black and gold lines and blue bars above).
The histogram of the stock's 9-day EMA (the blue bars) is above zero, while the 12-day EMA (the black line) runs above the 26-day EMA (the gold line) -- with both in positive territory.
Traders historically see this combination of conditions in the MACD as bullish.
(Moomoo Technologies Inc. Markets Commentator Stephen “Sarge” Guilfoyle had no position in ORCL at the time of writing this column.)
This article discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. This content is also not a research report and is not intended to serve as the basis for any investment decision. The information contained in this article does not purport to be a complete description of the securities, markets, or developments referred to in this material. Moomoo and its affiliates make no representation or warranty as to the article's adequacy, completeness, accuracy or timeliness for any particular purpose of the above content. Furthermore, there is no guarantee that any statements, estimates, price targets, opinions or forecasts provided herein will prove to be correct.
Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third-party platform.
