Why You Should Buy the Dip on Oracle Stock

The security looks ripe for analyst upgrades, too. Of the 19 in coverage, 13 consider ORCL a “hold.” What’s more, the 12-month consensus price target of $81.67 is an 8.6% discount to current levels, meaning a few price-target hikes could be on the horizon as well.

An unwinding of bearish sentiment in the options pits could also put some wind at Oracle stock’s back. The security’s Schaeffer’s put/call open interest ratio (SOIR) of 1.10 stands higher than 93% of readings from the past year, indicating short-term options traders have rarely been more put-biased over the past year during this time.
 
The equity has shown underlying strength. Specifically, short interest has added 50% over the past five months, while ORCL has tacked on 25% in that same time period.
 
As we stated before, now looks like a perfect time to speculate on Oracle stock’s next move higher with options. The stock sports a Schaeffer’s Volatility Index (SVI) of 30%, which stands in the 31st percentile of its annual range, meaning options traders are pricing in relatively low volatility expectations at the moment. Lastly,  our recommended call has a leverage ratio of 9.1 and will double in price with a 10.3% rise in the underlying stock.