Following a strong earnings report, Oracle shares surged above $160, marking roughly a 1.5-month high:
→ Earnings per share: expected $1.70, actual $1.79;
→ Revenue: expected $16.7bn, actual $17.2bn.
This is the first quarter in 15 years in which both revenue and earnings rose by more than 20%. Additional optimism came from:
→ Cloud infrastructure revenue, which jumped 84% to $4.9bn;
→ Oracle confirming a five-year, $300bn deal with OpenAI (Project Stargate);
→ Total backlog (future revenue) surpassing $553bn.
These developments have the potential to significantly ease downward pressure on ORCL shares, which had been in a downtrend following a record high last autumn.
In our technical note of 5 February, the stock fell below $150, and we:
→ highlighted support levels that could halt further declines;
→ suggested that “smart money” might view prices below $150 as attractive.
That same day, ORCL shares formed a low from which they did not fall further.
Recent price action, including a bullish gap above $160, indicates that buyers are regaining control. However, they may need to exert substantial effort to confirm their strength, given that:
→ the $170 level, formerly support, now acts as resistance (indicated by an arrow);
→ the descending channel (shown in red) remains relevant.
