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Oracle's Earnings Rally Tumbles With Market Rattled By Inflation

What started out as a good day to report earnings has turned into an extremely bad one for Oracle Corporation (NYSE: ORCL). The price action following the software stock's first-quarter report makes it the PreMarket Prep Stock of the Day.

Benzinga · 09/13/2022 16:51

What started out as a good day to report earnings has turned into an extremely bad one for Oracle Corporation (NYSE: ORCL).

The price action following the software stock's first-quarter report makes it the PreMarket Prep Stock of the Day.

Oracle Follows S&P 500 Index Higher: Similar to the S&P 500 index, Oracle was on a four-day winning streak heading into Tuesday’s session.

After putting in a trio of lows at the $73.50 area early last week, the issue embarked on a substantial rally.

Despite the turbulent market conditions on Tuesday, the issue has made a new high for the rebound at $79.41. It faced a challenge to improve on its highest close for the rebound, as the stock was trading actively near Monday's close of $77.08. Oracle ultimately ended Tuesday's session at $76.04. 

Related Link: Oracle's Cloud Business Sustains Momentum On Heels Of Mixed Quarter Results, Cerner Deal

Oracle's Q1 Report: Oracle was fortunate to report after the close on Monday, when there was still optimism the August CPI data would come in better than expected.

This was evidenced by the strong session on Monday and the follow-through in the after-hours. 

In fact, the Street was willing to overlook Oracle's first-quarter miss. After the close, the company reported quarterly earnings of $1.03 per share, which missed the analyst consensus estimate of $1.07 by 3.74%.

The company reported quarterly sales of $11.45 billion, which missed the analyst consensus estimate of $11.46 billion by 0.13%. 

On a positive note, the database software giant expects second-quarter revenue to be higher due to contributions from the recently acquired medical records firm Cerner.

PreMarket Prep's Take: When the issue was being covered on the show Tuesday, it was trading in the green by over a dollar at the $78.50 area.

“This a sliver lining market: they missed and took it down to major support, and some big buyers came in after,” said co-host Dennis Dick. 

“I did have this in my long-term portfolio for a long, but exited the issue and would need much lower prices to rebuy it.”

The author of this article noted there was no daily level that coincided with the premarket high of $78.84. Instead, investors looking to exit the issue should focus on the area of four consecutive highs between $79.42 and $79.88 back in mid-August.

ORCL Price Action: As a result of the steep decline in the stock index futures, the issue opened lower at $76.06 and immediately bottomed at $75.92 and reversed course.

The ensuing rally took the issue to the bottom end of the aforementioned resistance area, peaking at $79.41, and reversed course once again.

Watch Tuesday's PreMarket Prep show here: