Chart of the Day – Oracle of $ORCL

Share Button

Here’s a preview of what I’ll be discussing on Talking Numbers today between 3:20 and 3:30 pm EST on CNBC:

ORCL missed earnings and sales estimates, and provided weak guidance due to “poor sales execution” according to management.  Analysts are split on whether the weakness is due simply to poor execution, or a greater shift in enterprise software towards the cloud.  I read a wide-ranging, worth while interview with Netscape founder and prominent tech venture capitalist Marc Andreessen this weekend at Techcrunch.  For those interested in more in depth thoughts on the future of enterprise software, I highly recommend it.  In short, Andreessen thinks SAP and ORCL’s traditional businesses are in trouble because of the shift to the cloud.

What about ORCL’s stock after this 8% move lower today?  In the long-run, ORCL looks to have put in an important double-top.  The 5 year weekly chart:

5 year weekly chart of ORCL, Courtesy of Bloomberg

5 year weekly chart of ORCL, Courtesy of Bloomberg

With ORCL’s failure to punch through the 36.50 high from May 2011, it has put in a double top with today’s selloff.  That likely implies lower prices ahead, with long-term support coming in at the 200 WEEK moving average around 28.  The 200 week ma has acted as support throughout the 4 year bull market for ORCL.  In the short-run, the key level to watch is the 200 DAY moving average, shown on the next chart, the 1 year daily:

ORCL 1 year daily chart, Courtesy of Bloomberg

ORCL 1 year daily chart, Courtesy of Bloomberg

This is a 1 year daily chart of ORCL showing the 200 day ma in red, currently at 32.  ORCL hasn’t traded below the 200 day ma in 9 months, and it acted as support in November’s selloff.  That’s the obvious short-term support level to watch going forward, and it was not breached this morning, when ORCL traded at a low of 32.18.