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September 12 Chart of the Day - Oracle

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Oracle (ORCL) released its quarterly earnings after the bell on Monday and its stock price dropped about 10% in after hours trading.  Some analysts said the drop was based on slowing cloud sales...

But is the drop based on news or just plain price action technical analysis?

Oracle stock has more than doubled during the past 12 months from $61 to its recent all time high (ATH) of $127.54.

On the monthly chart we can clearly see the "breakout" above previous ATH $106.34 surging above a 20 year trend line.  Price has already back tested the trend line around $111 so will this drop serve as a second back test or could it fall even further to back test the previous ATH $106 area?

Only time will tell for sure but for those who believe news events can drive price action it's interesting to note that Oracle CEO Larry Ellison is set to meet with Microsoft CEO Satya Nadella later this week on Thursday and we can't imagine that anything negative could come out of that but you never know...

In looking at the weekly chart, should price decide it wants to continue its meteoric rise then based on Fibonacci extension levels further upside targets could be in the $135 area or possibly even higher in the $150+ range.

However, if "the bottom falls out" we've used Fibonacci stacking to identify potential levels of interest to the downside.

So what's next? 

We don't make predictions...

Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.

  1. Support/Resistance
  2. Trend
  3. Fibonacci 
  4. Supply/Demand Zones,
  5. Change Control Zones

Take a look at the charts and let us know what you think.  

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