Oracle Corporation (NYSE:ORCL) — I last reviewed Oracle, a leading provider of enterprise technology software, solutions and hardware, on Jan. 23. In that review, I suggested that ORCL be bought under $40 with a trading target of $48.
On March 16 the stock reached a high at $46.99. During the breakout run from the resistance line of the rectangle at $41.50, a gap opened from $43.20 to $45.65. After topping, the stock ratcheted down until, on Friday, it closed about half of the gap. At that point ORCL stock reversed on a CBR Buy from my proprietary system.
Standard & Poor’s projects that Oracle will increase revenues from 1% to 4% annually from fiscal year 2017 (May) to FY 2019. Despite downgrading the stock from a “strong buy” to a “buy,” they raised their 12-month price target by $4 to $51 and increased their EPS estimates for FY 2017 by 8 cents to $2.64 and FY 2018 by 2 cents to $2.83.
They initiated a FY 2019 EPS at $3.09, noting that ORCL’s Feb-Q was 7 cents over their estimate with a 62% increase in revenues from the cloud. Dividends were raised 27% to an implied yield of 1.7%. Oracle has paid a dividend each year since 2000.
Since break-away-gaps don’t usually fully close, and a CBR Buy was executed on Friday, Oracle’s bottom may be Friday’s intraday low at $43.99. Therefore traders and investors, too, should consider this stock at its current price at about $44.
Traders should target their ORCL stock transaction at $51, but investors may hold this stock for long-term participation in the broad aspects of the corporate information technology (IT) industry.
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