Last Friday, I recommended a bullish trade on Slack Technologies, Inc. (NYSE:WORK) because of its rise to (greater) prominence during the COVID-19 pandemic, and this morning I’m looking at Oracle Corporation (NYSE:ORCL) as the target of a new bullish put write.
ORCL is an information technology services provider with a focus on cloud-based software, meaning it, like WORK, has seen a lot of new business thanks to the COVID-19 pandemic.
With cases rising across the country, it doesn’t look like workers will be eager to get back in the office anytime soon. ORCL stands to benefit.
Still Beating Expectations
In its most recent earnings report, ORCL came in above expectations. This shouldn’t exactly be surprising because the company beat expectations for the last four quarters, but it’s easy to forget that we’re living in strange times.
The COVID-19 pandemic and subsequent popularity of working from home has probably also helped ORCL continued growing.
With cases rising in many of the reopening states, workers may opt to stay at home when possible, and that means companies like ORCL are going to be critical to many businesses’ operations.
Pushing to Pre-Pandemic Levels
Like almost every stock in the market, ORCL dropped in March. But this company’s recovery can truly be described as “V-shaped.”
In the chart below, you can see that ORCL started trading within its pre-pandemic range by mid-April, and this week it has challenged its old resistance in the $55-$56 range.
Daily Chart of Oracle Corporation (ORCL) — Chart Source: TradingView
The stock isn’t as strong as it was before the pandemic. Rather than consolidate between $52 and $56, ORCL’s lower bound has dropped to around $51. But that support is still solid, and so is ORCL’s trend. By selling a put write on the stock with a strike just below support at around $51, traders can collect quick income.
Sell to open the ORCL July 24th $50 put at about $0.47.
Note: Be sure you are opening the weekly ORCL options that expire on Friday, July 24, 2020.
This is a high-risk trade, so take a small position.
About Naked Put Writes
A naked put write is a bullish position in which you expect the price of the underlying stock to increase.
InvestorPlace advisor Ken Trester also brings you Power Options Weekly, which delivers 5 new options trades and his latest trading advice to you each Friday. Trester has been trading options since the first exchanges opened in 1973 with a winning streak that goes back to 1984 with money-doubling average annual profits since 1990.