Watch Out for These Levels in Oracle's Stock Price

Oracle (ORCL) shares jumped in premarket trading Wednesday after the enterprise software giant announced cloud infrastructure deals with Microsoft (MSFT), Alphabet’s Google (GOOGL) and Chat GPT owner Open AI that outweighed quarterly results that fell short of Wall Street expectations.

Below, we analyze the stock chart for the using technical analysis and point out several key levels to watch amid an expected breakout from a well-known chart pattern.

Shares Oscillate Within Ascending Triangle

Oracle shares have oscillated within a broad ascending triangle since mid-December, with the price testing the pattern’s lower trendline on several occasions over the past six months but remaining above both the 50- and 200-day moving averages. 

Typically, an ascending triangle suggests a continuation of the prevailing trend prior to its formation, which in the case of Oracle shares, is a resumption of the stock’s uptrend.

It's also worth noting that share volume has increased in the lead-up to the company’s quarterly results, potentially indicating accumulation by institutional investors who tend to buy shares over time to avoid significantly moving the price.

Monitor These Key Chart Levels

Following Wednesday’s expected breakout from the ascending triangle to a new record high, investors can use technical analysis to predict a possible longer-term price target using the measuring principle.

To do this, calculate the pattern’s widest distance in points and add that figure to the triangle’s top trendline. For instance, we add $29 to $129, which projects a price target of $158. Investors may use this level to lock in profits or monitor as a potential region on the chart where the shares may face selling pressure.

During pullbacks, investors should keep an eye on the $129 level, an area where the price is likely to find support from the ascending triangle’s top trendline. A breakdown below this region could see a retest of the pattern’s lower trendline, currently sitting around $118.50.

Oracle shares were up 8.3% at $134.05 about two hours before Wednesday's opening bell.

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As of the date this article was written, the author does not own any of the above securities.