Oracle Corporation (ORCL) provides software and information technology products for on-site applications on customized hardware and in software for cloud computing services. The company is scheduled to report earnings after the closing bell on Monday, March 19.

The stock closed Friday, March 16, at $52.27, up 10.6% year to date and up 13.6% from its Feb. 9 low of $45.92. Oracle set its all-time intraday high of $53.48 on March 13 and then closed below its March 12 low of $52.66, which defines a daily "key reversal." The stock has been above a "golden cross" on its daily chart since Feb. 24, 2017, and is well above its 200-week simple moving average or "reversion to the mean" at $42.40. The stock has been riding its "reversion to the mean" higher since December 2004.

Analysts expect Oracle to post earnings per share of 72 to 74 cents when the company reports results on Monday. Analysts have recently upped their estimates, which fueled strength to the stock's new high on March 13. The "key reversal" is a warning that an earnings beat is already priced into the stock. (See also: Oracle's Plan to Beat Amazon, Microsoft on Cloud.)

The daily chart for Oracle

Daily technical chart showing the performance of Oracle Corporation (ORCL) stock

Courtesy of MetaStock Xenith

Oracle began 2018 well above a "golden cross" that was confirmed back on Feb. 24, 2017, when the stock closed at $43.17. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving and indicates that higher prices lie ahead, and this was obviously a successful investment strategy for Oracle.

Note the daily "key reversal" shown in the upper right on March 13. The horizontal line above the chart is a projected quarterly pivot just above the high at $53.50. The first key level to hold on weakness is my annual pivot of $51.70, which has been a magnet year to date. The lowest horizontal line is my semiannual value level of $47.61, which held as 2018 began and was a magnet as the stock bottomed in February.

(If you're interested in learning to analyze charts using moving averages, check out Chapter 2 of the Technical Analysis course on the Investopedia Academy)

The weekly chart for Oracle

Weekly technical chart showing the performance of Oracle Corporation (ORCL) stockCourtesy of MetaStock Xenith

The weekly chart for Oracle is positive, with the stock above its five-week modified moving average of $50.90. The stock is well above its 200-week simple moving average of $42.40, which is the "reversion to the mean," last tested during the week of Jan. 13, 2017, when the average was $38.60. The 12 x 3 x 3 weekly slow stochastic reading ended last week rising to 71.64, up from 66.19 on March 9.

Given these charts and analysis, investors should buy Oracle shares on weakness to my semiannual value level of $47.61 and reduce holdings on strength to my projected quarterly pivot of $53.50. Aggressive buyers can use my annual pivot of $51.70 as a first entry level. (For more, check out: 5 Stocks to Ride the Hottest Tech Trends: Wick.)

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