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Oracle (ORCL) Working on a Double Bottom at Key Support

Oracle's price action has been bearish since the end of 2014 after making a high at 46.65. After that, price consolidated for the first half of the year before falling sharply until hitting 35.15. 

ORCL Weekly Chart 10/5

(click to enlarge)

The 35-36 area represents a key support/resistance pivot area that goes back to 2013. The market has indeed stalled there. Also note the test of the 200-week simple moving average and the weekly RSI turning up from below 30. These are signs that ORCL is ready for a bullish correction. For a bullish outlook, we should first limit our expectation to the 42 area, which is a key support/resistance pivot area as well. If the market is going to form some kind of head and shoulders, it might provide resistance here around 42-43. But first, let's focus on the price action in the past few weeks that appears to be forming a price bottom against the 2015-decline.

ORCL 4H Chart 10/5

(click to enlarge)

The 4H chart shows that the market might be working on what could be a double bottom. But remember, only a break above 38.50 completes a price bottom. At the moment, we would be front running it, possibly a bit prematurely, especially since the 4H RSI is still under 60, which shows maintenance of the prevailing bearish momentum.

Still, the 4H bullish engulfing candlestick is a strong sign that the market might indeed be forming the double bottom. Above 38.50, the 40.00 handle where the 200-period SMA in the 4H chart resides is a key resistance and psychological level. If the double bottom continues to provide support, then we can anticipate further upside above 40. 41 is a support/resistance pivot. 43, which is the middle of the consolidation range in the earlier part of the year, could be a viable target if the double bottom starts to hold.