Look For This Stock to Continue Its Uptrend

Oracle Corporation (NYSE: ORCL) seems poised for a price surge based on its latest charts. The company offers products and services that address enterprise information technology environments worldwide. Its Oracle cloud software as a service offering includes various cloud software applications.

Bullish Indications

#1 Flag Pattern Breakout: The daily chart shows that the stock was in an uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern and is marked in the chart in purple color. Currently, the stock has broken out of the flag. A Flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case).

#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating that the bulls are still in control. This is a positive indication.

#3 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below the –DI and +DI lines. This indicates possible bullishness.

#4 Bullish Stoch: The %K line is above the %D line of the stochastic in the daily chart, indicating possible bullishness.

#5 Above Support Area: As you can see from the weekly chart, the stock has currently moved up from a resistance-turned-support level. This level is marked as a pink dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are still in control.

#6 Bullish MACD: The MACD line is above the MACD signal line in the weekly chart, indicating bullishness.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, you can purchase the shares of ORCL above the price of around $245.00. Alternatively, you can purchase the shares of ORCL if it corrects to the price of around $231.00.

TP: Our target prices are $280 and $320 (for entry near $245.00) and $260 and $300 (for entry near $231.00) in the next 3-6 months.

SL: To limit risk, place stop-loss at $225.00 (for entry near $245.00) and $215 (for entry near $231.00). Note that the stop-loss is on a closing basis.

Our target potential upside is 12% to 30% in the next 3 to 6 months.

• Entry near $245.00: For a risk of $20.00, our target rewards are $35.00 and $75.00. This is a nearly 1:2 and 1:3 risk-reward trade.
• Entry near $231.00: For a risk of $16.00, our target rewards are $29.00 and $69.00. This is a nearly 1:2 and 1:4 risk-reward trade.

In other words, this trade offers nearly 2x to 4x more potential upside than downside.

Risks to Consider
The stock may reverse its overall trend if it breaks down from the flag pattern with high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.

Happy Trading!

Tara

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