Oracle, $ORCL, pulled back to a low in December at the same level as the June low. Since then it has moved higher. In March it confirmed a double bottom as it consolidated. Then continuation to the new all-time high at the end of April. It pulled back with the market then, reaching the lower Bollinger Band® at the end of last week. Friday saw it reverse to the upside.
The pull back now appears to be a bull flag and gives a target to the upside of at least 59.50. The RSI is also turning higher after making a lower low, confirming a Positive RSI Reversal. This also gives a target near 59.50. The MACD turned to level, halting its drop, and remains positive. There is support lower at 53.50 and 52.60 then 52 and 51 before 50 and 49.40. There is no resistance above 55.50. Short interest is low under 2%. The company is expected to report earnings next on June 17th. The stock pays a dividend yielding 1.76% and went ex-dividend last on April 10th.
The May options show the biggest open interest at the 55 call strike this week. The June chain shows the biggest open interest on the call side clustered at 55 and 57.50. The put side is biggest at 46 and then from 50 to 52.50. And the July options are biggest at 50 and 52.50 on the put side but at 60 on the call side.
Oracle, Ticker: $ORCL
Trade Idea 1: Buy the stock on a move over 55 with a stop at 53.
Trade Idea 2: Buy the stock on a move over 55 and add a June 52.50/50 Put Spread (55 cents) while selling a June 57.50 Call (60 cent credit).
Trade Idea 3: Buy the June/July 57.50 Call Calendar (40 cents) and sell the June 50 Put (45 cent credit).
Trade Idea 4: Buy the July 50/57.50 bull Risk Reversal (30 cents).
After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the May options expiration week sees equity markets have reset lower, but ended the week strong. This suggests the pullback may be ending.
Elsewhere look for Gold to pause in its downtrend while Crude Oil continues to pullback in the uptrend. The US Dollar Index looks to continue to move sideways while US Treasuries are biased to continue higher. The Shanghai Composite may be ending its pullback while Emerging Markets are biased to the downside in the short run.
Volatility looks to settle back after a pop higher, easing the pressure on the equity index ETF’s SPY, IWM and QQQ. Their charts show decent resets lower in the SPY and QQQ with the IWM back in its range. Use this information as you prepare for the coming week and trad’em well.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.