Oracle Corp. (NASDAQ:ORCL) — Lawsuits with Google (NASDAQ:GOOG) and Micron Technology (NASDAQ:MU) have been a major distraction for Oracle’s management. Its sales growth and earnings momentum have fallen, and there are concerns about revenues growth due to competition from other cloud-computing technologies.
On May 7, with the stock trading at about $28, the Trade of the Day said, “Technically ORCL is in a bear market. Each attempt to rally falls short of holding above its 50-day and 200-day moving averages. Volume has also been a strong negative.
“If you own ORCL, sell at the market, but traders may desire more aggressive leveraged strategies using puts, etc. The downside target for traders is $24.50, but a break there could take it into the teens.”
Since then, the stock triple-bottomed at $25, but yesterday’s pop on mediocre volume will probably take it back to our original sell point at $28. Big descending triangles like this usually break in the direction of the general trend, which is down.
Sell ORCL at $28 or higher or short it with a target in the low $20s.
