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This could be the new safety trade | Talking Numbers

https://breakingnewstodayx.blogspot.com/2014/02/this-could-be-new-safety-trade-talking.html

Old is a relative term.

A decade ago, Oracle, Cisco and Microsoft were the poster children for a stock market gone wild, each with multiples that would make Facebook look like a value stock. Fast forward 15 years and the picture has changed. Each company pays out a decent dividend (unheard of in 2000), is flush with cash and sports a moniker more befitting their mature status: old tech.

And, here's where it gets really interesting: It looks like they've become this year's safety trade.
While the Nasdaq is down this year, these three stocks are in positive territory, with Microsoft and Oracle up more than 7 percent.

(Read: Foursquare splits in two with new Swarm app)

How long can that last, and are any of them worth buying?

According to Gina Sanchez, founder of Chantico Global, the best stock to own out of all of these Vanilla Ice decade darlings is Oracle.

"Oracle is taking advantage of the fact that they're a huge dominating player in the database market," said Sanchez, a CNBC contributor. "They're getting into a new database area, which is unstructured data. It's the kind of data that's archived on Facebook, Google, [and] Twitter. And, this is turning out to be a gold mine for marketers [and] for the government.

A huge chunk of websites use Oracle's MySQL, a relational database management system. But Oracle is now also involved with NoSQL, a nonrelational system that is better suited for big social media sites' enormous amounts of data. Sanchez also notes that the company is making a push into cloud computing, an area Ellison was once accused of not understanding.

 (Watch: Greenberg: Cloud bubble was bound to burst)

"They're playing in the right areas," she said. "They may be old, but they aren't out."

While the fundamentals may look interesting for Oracle, the charts tell another story, according to Richard Ross, Auerbach Grayson's global technical strategist.

"I see some signs for caution here in the short term," said Ross, a "Talking Numbers" contributor, about Oracle's one-year chart.

After soaring in late March, Oracle's stock fell after a "blow off top formation, according to Ross. That has been followed with a potential retest of that recent high.

"If that retest fails, it does set you up for disappointment," warned Ross. "It's a psychological blow and you could get a pullback here to that 100-day moving average. I think that's what's going to happen."
The 100-day moving average for Oracle is nearly $38, roughly $3 below its Thursday closing price.

Looking at a 16-year chart of Oracle, Ross sees bearishness ahead. Though the stock is near its all-time highs, Ross believes now wouldn't be a bad time to get out.

"This is a strong trend," Ross said. "On the same token, I'm not sold on this rotation back into the old generals. So, if you have some profitswhich I don'tyou want to sell some here."

To see the full discussion on Oracle, with Sanchez on the fundamentals and Ross on the technicals, watch the above video.

Disclosure: Neither Sanchez nor Ross has positions in the companies mentioned.


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