Ticker: ORCL
Description of why you are requesting DD: Been following Oracle since the Cerner acquisition news and it saw some really interesting price action today. This is partially a placeholder for me to add more dd regarding that, upcoming div x date and other bearish catalysts.
If possible any who is able to feel free to make this post wiki in case anybody else wants to tack on (or maybe dm me how if it’s something I can do)
Applicable links to news articles or Reddit analysis: none for now.
Anyway, here’s a chart. 200 EMA and Fibonaci Regression.
For a few days I have traded puts with entries targeting 200 EMA with relative success, especially on the day pictured in the chart. It bounced cleanly off of 200 EMA three times. I think this is a good volume stock with predictable swing patterns, and would love for somebody more knowledgeable than myself to take a look at it.
I’ll be looking to re- enter for the next 2 weeks using this strategy and targeting atm/ 1 strike itm puts. In 2 weeks there will be a div x date for a 0.32 dividend which I believe will be priced into the underlying stock as well as option premium (please illuminate me if this is incorrect or more nuanced).
Good stuff here. If you took advantage of the slow unwinding after their earnings call then thats great, good for you.
Im sort of surprised that they had such a big ER bump with a subsequent falling in share price afterward. I would be curious to see what cause the stock to spike on ER and see if we can identify a potential catalyst going forward.
Net/net i think my question for you here is - what do you need help with? You’ve clearly identified a winning strategy (proud) so lmk what you need clarification on.
At work so just slamming some ideas down to clean up this evening.
Right now the main catalyst seems to be the Cerner (CERN) acquisition. There must still be some uncertainty involved, because published rumors say $95/share, but CERN is trading around $93 as of the time of this post (been trending up from 90 for a few days).
On top of that, ORCL recently received a major credit downgrade. Acquisition news and a high div payment… Expensive and requires a lot of cash utilization. Definitely feels overvalued, and institutions seems to agree. JPM PT is ~60.
All that said, I am long term bullish. Cerner has strong moat which Oracle will absorb when the acquisition closes. They have a strong legal team leading the acquisition, and they have demonstrated success in tech acquisition in the past (PeopleSoft most recently). Entering Cerner medical data sector leaves room for bundling, etc. to offer existing service to new customers and increase revenue and moat long-term. High volume (read: high liquidity) makes it easy to get in and out at your targets.
The spike was an announced buy back during earnings, unfortunately it couldn’t have been seen. I opened calls for the ER based on movement before market close and made a pretty penny but it was serendipitous, not calculated.
2 day chart. Still bouncing hard off of EMA 200 on the 5m candles. 3 entry points today that all were nearly immediately profitable. 2 were absolute bangers.
It could open rather low tomorrow. Maybe even close to 87. Early market volatility makes me want to exit and wait for it to trend back up to EMA 200 for re-entry. This is a fairly simple stock to swing trade if you just stick to entering on the bounce. I hold my finger on the buy button once it’s near.
Another couple of banger entries today.
I realized I didn’t talk much about my exit plan with this strategy. This chart has highlighted fairly ideal entries for the day based on EMA (200) crossing and and exits based on SMA (9) momentum swing. Fairly simple set of indicators.
Besides that, I also treat any price under death cross to be no-mans-land. That’s usually when I make a firm decision about how much profit I need to take and how much to let ride. Especially double death cross; then the stock trades entirely outside my indicators so no telling what it will do.
I am done with this play. ORCL has fallen outside my indicators. I do know 86 represents strong support and I believe that the stock is a fair price around 83 to 86. To me, it’s no longer attractive as a bearish play because it is too uncertain whether it will continue to fall
