After-Hours: Long on Accenture, Short on Micron, Sidelined on Oracle

Includes: ACN, MU, ORCL
by: Midnight Trader

Below is a brief recap on each of the top-volume, news-driven movers in Thursday's after-hours, taking a look at specific stocks' after-hours movement and how that trade may offer insight into potential floor supports, ceilings and trading ranges that could develop in Friday's pre-market and early regular session.


Accenture (NYSE:ACN) advanced 2% to 56.81 in Thursday's after-hours session after topping Q3 estimates and boosting its earnings outlook. ACN vaulted to an early after-hours high of 57.50 before dropping back to hold plus-side levels between 56.75 and 57.35 - a range where it stayed through the bulk of its evening action. A pre-market open Friday may have potential near the 56.75 to 57.25 range. ACN has seen positive post-bell earnings-driven trading in 19 of the 27 quarters we've tracked, and in 15 of those upside evening moves, or 79% of the time, the stock has followed that trade with a more aggressive positive run in the next day's regular session. The strong historical trend on the upside would have us looking at a possible long play on ACN Friday morning. Early longs may want to target potential entry points between 56.75 and 57, a base level that held through Thursday's after-hours session and a floor support that could hold early Friday for catching upside bounces deeper into the 57s.


Oracle (NASDAQ:ORCL) declined 4% to 31.15 in Thursday's after-hours trade despite beating Q4 expectations and setting its Q1 guidance in line with estimates. ORCL tumbled to negative levels between 30.90 to a low of 30.01 and stayed in this range for the bulk of its first-half and early second-half of night trade. Buyers moved into the shares following the company's guidance update on its conference call near the start of the second-half of after-hours action. The stock firmed from 30.50 to 31.50 through the late second-half. A pre-bell open Friday may have potential surrounding the 31.25 area. ORCL has recorded an earnings-driven after-hours decline in 11 of the 29 quarters tracked in our database. The stock favors widening in its next-day performance following an evening decline, adding to its downside seven times, or 64% of the time, and reversing direction four times. The tendency to add to earnings-driven declines in next-day action offers shorts a decent play in ORCL on Friday, but we would still be wary of betting too heavily on the downside considering some aggressive post-guidance buying recorded Thursday night. Shorts may want to move to the sidelines early tomorrow and perhaps watch for where a potential near-term top could form in the high- to mid-31s. On the long side, buyers looked confident late Thursday off the session low of 30.01 up to 31, an area where a possible near-term floor support could develop.

Micron Technology (NASDAQ:MU) tumbled 13.3% to 7.31 in Thursday's after-hours trading after missing Q3 estimates. MU dropped to negative levels between 7.99 and 7.68 through the early first-half of night trading . Sellers grew more aggressive into the late first-half and second-half, driving MU south from 7.85 to a session low of 7.20. Evening indications would suggest MU records a potential pre-market open Friday near 7.40 to 7.25. Micron favors widening in its long-term movement between the sessions, cutting back or reversing its evening performance in next-day trade in 12 quarters, widening in 16 and once matching its evening move during the following day's regular trading session. A deeper look into the performance of MU between the sessions reveals shorts see a modest advantage historically. The stock recorded a downside move 18 times in the last 29 quarters, and in 10 of those negative trades MU followed that action by widening, or adding to its negative trade in the next day's bell-to-bell action. The modest tendency to add to after-hours declines, combined with some vigorous downside pressure recorded Thursday night, would have us looking at a short play on the shares Friday morning. Shorts may want to target potential entry points between 7.70 and 7.50, an area where downside liquidity increased significantly in Thursday's after-hours. More risk tolerant shorts may want to bring the entry down closer to 7.50 to 7.40 as the shares likely start the day closer to these levels and perhaps make a run to fresh near-term lows closer to the 7.00 area.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.