Shares Have Gained More Than 20% This Month

Key Takeaways

• Oracle shares will likely remain in focus on Tuesday after jumping more than 5% to a new record high yesterday following recent bullish coverage from investment firms.

• Gains in the stock accelerated last week on the highest trading volume since mid-December, though the relative strength index indicates overbought conditions, potentially leading to short-term profit taking.

• Investors should monitor key retracement levels on Oracle's chart at $145 and $127.

• A bars pattern price target, which extracts the stock’s trending move following a retest of a prior ascending triangle in late January 2021 and repositions it from the current pattern’s retest area, projects a profit target of around $215.

Oracle (ORCL) shares will likely remain in focus on Tuesday after jumping more than 5% to a new record high yesterday following recent bullish coverage from several investment firms.

Jefferies analysts lifted their price target on the stock to $190 from $170 over the weekend, while New York-based Melius Research on Monday upgraded the shares to a “buy” rating, with both firms impressed with the software giant's advancements and growth opportunities in the cloud computing market.

Oracle shares have gained 22% so far in September through Monday’s close, paving the way for their best month since October 2022. Investors cheered the company’s better-than-expected earnings report, which was announced last week alongside a new partnership with Amazon’s (AMZN) cloud computing unit as Oracle continues to expand its artificial intelligence (AI) footprint.

The stock was up 0.6% at $171.30 in recent premarket trading Tuesday.

Below, we’ll take a close look at the technicals on Oracle’s weekly chart and identify important price levels to watch out for.

RSI Indicator Flashes Overbought Conditions

After rallying to a new record high in mid-July, Oracle shares retraced to the top trendline of an ascending triangle before resuming their longer-term uptrend in early August.

More recently, gains accelerated last week on the highest trading volume since mid-December, though the relative strength index (RSI) indicates overbought conditions, with a reading above the 70 threshold. Consequently, the stock may see short-term profit taking before potentially making another trending move higher.

Key Retracement Levels to Monitor

During pullbacks, investors should monitor two key price levels.

The first sits at $145, an area on the chart where the shares may initially find support near last week's earnings breakout point and a series of comparable trading levels positioned around the July peak.