Oracle Corp. (ORCL) stock has had a rough few months, but the recent bounce might have legs, according to Guy Adami, co-founder of RiskReversal.

The numbers tell the story: Oracle shares climbed roughly 10% over the past five days. But zoom out a bit, and the picture gets uglier. From October 1 through December 9, the stock dropped about 23%.

What's Driving the Optimism?

Adami appeared on CNBC's Closing Bell Overtime on Tuesday and made his case for why the current bounce should continue. "I think it will recover," he said, pointing to Oracle's September 10 announcement about a massive revenue deal that he believes triggered an overreaction.

That September announcement was indeed massive. Oracle reportedly secured a roughly $300 billion, five-year deal to supply computing power to OpenAI. It was one of the largest agreements of its kind in history, the sort of thing that makes headlines and moves stock prices.

The Problem With September's Big Moment

Here's where Adami's analysis gets interesting. He said the stock surged after Oracle highlighted the revenue side of that deal but didn't provide clear updates on what it meant for earnings. The result? Shares traded at levels that proved unsustainable.

Adami also brought up a technical detail: there's a "gap" near the $255 level, and he expects the stock to eventually trade back into that range. He noted he didn't think Oracle would fall below $200 during the pullback. (For the record, the share price did dip below $200 in November.)

"I think this relief rally we're seeing is a continue," Adami said. "You'll see a bounce somewhere between that $250 and $255... Sort of equilibrium for this name."

Earnings Day Approaches

Oracle is set to report its second-quarter financial results on Wednesday after the market closes, which adds some urgency to Adami's thesis.

Analysts are projecting second-quarter revenue of $16.22 billion, up from $14.06 billion a year ago. That sounds impressive, but Oracle has a spotty track record lately: the company has fallen short of Wall Street's revenue forecasts in seven of the past ten quarters.

On the earnings side, analysts expect $1.64 per share, compared with $1.47 in the same quarter last year. Oracle has missed EPS estimates in three of the last four quarters, though it has beaten expectations in seven of the past ten overall. So, mixed results.

Back in September, Oracle reported first-quarter revenue of $12.45 billion, a 9% increase year-over-year. The problem? It came in just below the Street's consensus estimate of $12.46 billion. Close, but not quite.

What the Data Suggests

The technical picture shows some near-term challenges alongside longer-term potential. Market analysis suggests Oracle may face short- and medium-term headwinds while signaling strength over a longer horizon.

Whether Adami's call plays out depends largely on what Oracle delivers Wednesday evening. If the earnings report shows that the OpenAI deal is translating into real profit growth and not just revenue headlines, the relief rally could indeed have room to run. If not, that $200 level might come back into play.