Oracle Stock Faces Critical Price Levels After Earnings Miss and Soft Forecast

Summary Highlights

• Oracle's stock declined significantly in after-hours trading following a fiscal Q2 earnings miss and subdued outlook.
• The shares are nearing a breakdown from a rising wedge pattern, signaling possible downward momentum.
• Key support zones to monitor include approximately $177, $165, and $145.
• Using technical analysis, a potential upside target could reach $236 if the stock reverses higher.

Oracle (ORCL) experienced a sharp selloff after reporting adjusted fiscal second quarter earnings that fell short of Wall Street expectations, coupled with cautious guidance amidst intensifying competition in the cloud sector.

Despite this, the company’s cloud infrastructure revenue rose 52% year-over-year, reflecting strong demand for AI-capable computing resources, aligning closely with analyst forecasts.

Heightened rivalry from tech giants like Amazon (AMZN), Microsoft (MSFT), and Google (GOOGL) has driven Oracle to increase infrastructure investments, raising concerns about potential pressure on profit margins due to higher capital expenditures.

The AI-driven growth narrative has propelled Oracle’s stock over 80% higher since the start of the year, significantly outperforming the Nasdaq Composite’s 31% gain during the same period.

Below, we analyze Oracle’s stock chart to highlight critical price levels to watch following the earnings announcement.

Rising Wedge Pattern Signals Possible Decline

Since late June, Oracle’s shares have been climbing within a rising wedge formation, a pattern often preceding a downward breakout.

On Monday, the stock reached a new all-time high before reversing sharply on heavy volume, closing lower and forming a bearish dark cloud cover candlestick pattern.

Following the earnings miss, Oracle appears set to gap below the wedge’s lower trendline, suggesting potential further selling pressure in coming sessions.

We identify key support levels and use measured move analysis to estimate a possible upside target if the stock rebounds.

Important Support Levels to Monitor

The first major support is near $177, just below the 50-day moving average, marking the upper boundary of a recent consolidation phase.

If the stock falls below this, the next support lies around $165, corresponding to a prior pullback low from late September.

A decisive break beneath $165 could lead to a test of $145, an area supported by the 200-day moving average and previous peaks from June and July, potentially attracting value-focused buyers.

Projected Upside Target Using Measured Move

Applying the measured move technique, which involves measuring the widest part of the rising wedge and adding it to the breakout point, provides an upside price target.

Adding approximately $35 to the wedge’s top trendline near $201 suggests a potential target of $236, where investors might consider taking profits if the uptrend resumes.

Note: This analysis is for informational purposes only and does not constitute investment advice. Readers should perform their own research or consult a financial advisor.

As of this writing, the author holds no positions in Oracle securities.

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