Oracle stock is down 46% from its September record, erasing all of its OpenAI deal gains and then some. The market soured on Oracle after it began to question Sam Altman’s company’s ability to actually pay what it owes under the terms of its many huge deals. But should investors jump ship or stick with Larry Ellison? That’s the question we hope to answer with the help of the Elliott Wave chart below.
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It reveals that the sell-off from $346 to $181 is a five-wave impulse pattern, marked 1-2-3-4-5 in wave A. Wave 1 is a leading diagonal and the five sub-waves of the extended third wave are also visible. According to the theory, a three-wave correction follows every impulse. This means that a notable recovery to ~$250 in wave B can be expected to begin once wave 5 is over.
Unfortunately for the bulls, this pattern also means that wave C would then drag Oracle stock even lower than wave A did. But wave B would provide much better exit levels for those who had the misfortune to buy into the OpenAI deal euphoria and are now deep underwater. They just have to keep in mind that this reprieve is likely to be temporary and not mistake it for the resumption of the uptrend.
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