Trade of the Day: Oracle Corporation (ORCL) Stock on Cloud 9

Oracle Corporation (NYSE:ORCL) — Oracle is a leading provider of enterprise technology software, solutions and hardware. Standard & Poor’s projects that Oracle will increase revenues from 1% to 4% annually from fiscal year 2017 (May) to FY 2019.

Cloud-related products and structures are a strong segment, accounting for 12% of revenues in the fiscal second quarter (Nov). This success was due in large part to the $6 billion purchase of five specialized cloud software companies. S&P has placed their highest rating, a five-star buy, on Oracle with a price objective of $47, after a raise of $3 in mid-December.

Even though revenues rose by only 1% in FQ2, Cloud rose 62%. Further, S&P is optimistic over “potential positive catalysts related to the (Donald) Trump administration.”

ORCL pays an annualized dividend of 60 cents, for a 1.5% yield. Dividends have been paid each year since 2000.

ORCL bottomed at under $34 in January 2016, then rallied to a high at $42 in March. Since then, the stock formed a rectangle with support at about $38.50 and resistance at $41.50. The last top produced a gap at $40.74 to $40.22, and Friday’s close above its 200-day moving average will most likely continue higher and close that gap.

Accumulation increased on Friday, and momentum could push prices through the resistance at $41.50. Friday’s momentum also produced a fresh MACD buy signal. Thus, buy ORCL at under $40 with a trading target of $48 for a proposed trading gain of 20%.

A stop-loss order should be placed at $37.50. Investors should also consider ORCL for its long-term participation in the cloud-computing segment of the Information Technology (software) industry.

ORCL B40T48
Click to Enlarge

Trade of the Day: Oracle Corporation (ORCL) Stock on Cloud 9The comments section on InvestorPlace.com will be disabled starting Jan. 25, 2017. Readers who would like to comment on any of Sam’s posts can do so on Facebook or Twitter at @InvestorPlace. Or, share your thoughts or send us an email at editor@investorplace.com. Read more about our comments policy here.


Article printed from InvestorPlace Media, https://investorplace.com/2017/01/oracle-corporation-orcl-stock-cloud/.

©2022 InvestorPlace Media, LLC