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Oracle Stock Investors in for a Bumpy Ride

Oracle Corporation was among the symbols of the Dot-com bubble. The company reached an all-time high of $46.47 a share in September 2000. Less than two years later, in June 2002, the stock was down by over 84% and was barely holding above $7. But unlike many other dot-com darlings, Oracle survived the crash and climbed to a new record high of $53.48 in March, 2018. Oracle stock’s recovery from the June 2002 low to March 2018 is what interests us, because its Elliott Wave structure is going to tell us if the recent dip is a buying opportunity or the beginning of a larger decline. Take a look at it on the chart below.
oracle stock elliott wave analysis
Oracle stock’s uptrend could be seen as a complete five-wave impulse pattern. A pattern which has been in progress for almost 16 years, labeled (I)-(II)-(III)-(IV)-(V). The sub-waves of wave (III) are also visible, as well as those of waves I and III of (III), while wave IV of (III) is a triangle. Since wave (V) also has a textbook five-wave structure, it follows that the entire surge from $7.25 in June 2002 is over and a three-wave correction should now develop. In order to achieve a respectable retracement, the bears should be able to reach the support area of wave (IV) near $33 a share. If this count is correct, Oracle stock might lose a third of its market capitalization from current levels. It looks like this is not the best time to buy the ORCL dip.



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