ORCL | Oracle Corporations Options Trade Idea Ahead of Earnings

ORCL Options Play

Oracle (ORCL), Oracle Corporation develops, manufactures, markets, sells, hosts, and supports database and middleware software, application software, cloud infrastructure, hardware systems, and related services worldwide. It offers services in three primary layers of the cloud: Software as a Service, Platform as a Service, and Infrastructure as a Service. ORCL reports earnings on June 21, 2017 let us look at a strategy to capitalize on the earnings report.

image of ORCL options Trading Chart

ORCL Techncial Analysis

Technically, the chart looks phenomenal! From the Dynamic Trend Indicator (available on Alphashark.com or email Lance@alphashark.com for link) ORCL meets all the criteria for a long or if already long stay with the trend. The multiple time frame analysis confirms positive momentum with price above the wave. Overhead resistance is at 46.07 which ORCL is knocking on currently on the path to new highs. Usually when a stock is approaching new highs weak hands will try to short it leading to a breakout on volume to new highs as the shorts will have to cover. Remember, we want to be strong hands as smart traders and not fight the trend!

As of June 9th, 2017, ORCL is trading at 45.60 with the expected move for June 23rd option expiration is $2.20 I can find the expected move by adding the ATM straddle for the week of expiration.  Therefore, if I add 45.60 + 2.20 = 47.80 as an upside target for an options play expiring on June expiration.

ORCL Trade Idea

I am bullish on ORCL using the Dynamic Trend Indicator with a price target of 47.80 Therefore, I can develop a trade that will take advantage of my expected move with limited capital requirements. The June 23rd 47 calls are trading at .48 debit, I am looking to buy these and sell the June 23rd 48 calls for .25 credit. This strategy is a bull call spread for a .23 debit (.48-.25 = .23.) My max loss on the trade is $23 per contract with my max gain being $77. This trade offers limited risk with 3-1 risk vs reward set up if ORCL trades at or above 48 by June 23rd option expiration. Written by: Lance Ippolito email: lance@alphashark.com

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