Adobe and Oracle Approach Record Highs Ahead of Earnings Announcements

This week, the spotlight shines on the leading software giants Adobe Inc. (ADBE) and Oracle Corporation (ORCL) as they prepare to release their quarterly earnings. Both companies are trading close to their all-time highs, yet investors remain cautious. Robust earnings and optimistic forecasts are essential to prevent significant sell-offs amid escalating concerns about a potential China-U.S. trade conflict triggering a global economic slowdown.

Oracle transitioned from the Nasdaq to the NYSE in 2013, with Tesla, Inc. (TSLA) taking its place in the Nasdaq-100 index. Over the past six years, Oracle’s shares have climbed approximately 71%, while Adobe has delivered extraordinary returns exceeding 600%. In 2019 alone, both stocks have gained roughly 20%, showcasing strong performance.

Adobe Inc. (ADBE)

Adobe is set to announce its Q2 earnings after Tuesday’s market close, with analysts projecting earnings per share (EPS) of $1.78 on revenues of $2.7 billion. After surpassing Q1 estimates but lowering Q2 guidance in March, Adobe’s stock dipped about 4%, only to rebound within two weeks to a five-month peak above $270.

Historically, Adobe broke through decades-long resistance near $50 in 2013, initiating a strong upward trend that withstood the 2015-2016 market correction. This resilience led to a breakout in June 2016, accelerating gains into early 2017. The rally peaked at $278 in September 2018 before experiencing a volatile decline, hitting a 10-month low in December.

The 2019 recovery mirrored the previous decline’s trajectory, retesting the 2018 highs in April. Despite an immediate breakout, momentum stalled, leading to a prolonged support test now entering its third month. For investors following trends, surpassing $282 would confirm a breakout, whereas falling below the June low of $257 could signal a failed breakout and potential for significant declines.

Oracle Corporation (ORCL)

Oracle is anticipated to report EPS of $1.07 on $10.9 billion in fiscal Q4 revenue following Wednesday’s market close. The stock experienced a gap down to a five-week low after surpassing profit estimates but meeting revenue expectations in March, yet it rebounded, closing with only a slight loss. It subsequently reached an all-time high and extended gains to $55.53 in April.

Oracle’s stock peaked at $46.47 during the 2000 internet bubble burst, a level it didn’t revisit for over 14 years. The decline bottomed at $7.25 in 2002, a support level that has held firm for 17 years. The stock gradually climbed within a gentle ascending channel before challenging multi-year resistance in 2014.

The rally peaked just 24 cents above the 2000 high in 2015, followed by consolidation and a 2017 breakout that stalled in the low $50s. Two breakout attempts in 2018 failed, while a 2019 surge hit a record $55.53 before reversing in April, indicating a failed breakout. Although the stock rallied strongly in June, it has yet to reestablish breakout support, increasing the risk ahead of this week’s earnings report.

Conclusion

Both Adobe and Oracle have reached historic highs in 2019 but face unresolved resistance levels, making their upcoming earnings reports critical for future price direction.

Disclaimer: The author held no positions in the securities discussed at the time of writing.

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