Tech’s seemingly unstoppable rally is starting to unravel.
The tech sector fell more than 2 percent on Monday, after growing scrutiny over Facebook‘s data-sharing practices sent that stock and the broader space reeling.
But according to a top technician there’s one name in the space that’s gearing up for a big breakout when it reports earnings Monday after the bell: Oracle.
Carter Worth, head of technical analysis at Cornerstone Macro, noted that over the last 10 years Oracle has underperformed the broader tech sector, lagging its peers by 50 percent. However, after soaring 9 percent this year, Worth says the technical setup points to new highs for the old tech darling.
A look at the five-year chart of Oracle reveals a well-defined cup-and-handle formation which Worth says “is usually resolved by an up.” In the same period, he highlights a falling wedge pattern, indicating a potential breakout above Oracle’s 52-week high of $53.48.
Furthermore, Worth noted that since Oracle has broken above its dot-com bubble high the stock has showed signs of strength.
“Often after breaking out from well-defined tops you check back to the top, pivot and start to go up again,” he explained.
“I love it. I want to be long Oracle going into its earnings,” Worth says. “The charts speak for themselves.”
Oracle shares were trading lower, around $51.57, on Monday afternoon.
