How to Profit from Oracle’s Recent Earnings Breakout

$orcl cash-secured puts cashflow cashflow machine conservative investing covered calls earnings report high-volume breakout investing strategies mark yegge option premiums options strategy oracle breakout oracle earnings oracle stock pivot point profit from stocks selling puts stock chart analysis stock market volatility stock options stock retest stock trading tlap trade like a pro

Oracle ($ORCL) has recently delivered impressive earnings results, causing its stock to skyrocket. In this blog post, we’ll break down Oracle’s earnings, analyze its stock chart, and explore strategies you can use to capitalize on this situation. Whether you're a seasoned investor or just getting started, this post will offer valuable insights into playing the market with Oracle.

Oracle's Recent Earnings Report: A Quick Overview

Oracle surprised the market with a strong earnings report. The company was expected to deliver earnings per share of $1.14, but they exceeded expectations by posting $1.39. The stock reacted positively, surging to new highs around $155, up from $146.70. This 17% jump, coupled with high trading volume, indicates a solid breakout.

Analyzing the Stock Chart: Key Takeaways

Oracle’s stock has broken out on a weekly chart, with a key pivot point at $146.70. The high-volume breakout candle suggests strong market momentum. However, most stocks tend to revisit their breakout points before continuing to climb, meaning Oracle may come back to retest the $146.70 level.

How to Profit from Oracle's Momentum

Selling Puts:

A conservative way to enter a position in Oracle is by selling put options. By selling a cash-secured put, you give someone else the right to sell you Oracle stock at a specific price. This is a way to potentially buy the stock at a discount. For example, you could sell a put with a strike price of $150. If the stock dips below $150, you’ll be assigned the stock at that price, but in the meantime, you collect a premium for selling the put.

Covered Calls:

Another strategy is to sell covered calls, where you buy Oracle stock and then sell call options against your position. This generates income, but caps your upside if the stock continues to rise. If Oracle stays flat or rises modestly, you keep the premium from selling the calls.

Why You Should Avoid Chasing the Stock

Oracle's stock has surged, but as the market is currently yellow, signaling caution, it's not advisable to chase stocks during high volatility. A safer approach is to wait for a retest of the breakout point or use options strategies to mitigate risk.

Life-Improving Tips for Investors

- Diversify your portfolio: Don’t put all your eggs in one basket. Even if Oracle looks like a great opportunity, diversify across sectors to minimize risk.

- Stay disciplined: Have a plan in place, whether you’re selling puts or using covered calls. Stick to your strategy and don’t let emotions guide your decisions.

- Watch the broader market: Understand the overall market trend. In a volatile or declining market, even good stocks can be affected.

FAQs

Q: What does it mean to sell a put option?

A: Selling a put option gives the buyer the right to sell you Oracle stock at a set price. You collect a premium for taking on this obligation.

Q: What’s the risk in selling covered calls?

A: The primary risk is that you limit your potential gains. If Oracle’s stock price surges past your call option’s strike price, you won’t benefit from the full increase.

Q: Is now a good time to invest in Oracle?

A: Oracle’s strong earnings report and breakout suggest it could be a good opportunity. However, the current market is volatile, so strategies like selling puts or covered calls are safer than buying the stock outright at this level.

Call to Action

If you’re interested in exploring more strategic ways to profit from stock movements like Oracle’s, consider following more of our stock analysis and investment guides. Don't miss out on future opportunities—sign up for our newsletter!

Get started today

Conclusion

Oracle’s earnings report offers a potentially lucrative opportunity, but as with any investment, caution is key. By selling puts or using covered calls, you can capitalize on Oracle’s breakout while managing risk. Happy trading!

How to Profit from Oracle’s Recent Earnings Breakout

Insider Tips Newsletter

Join Our Free Trial