While travel and leisure stocks are up for obvious reasons, energy stocks are running higher too. Increased economic activity bodes well for oil demand. That’s in addition to the extended production cuts from OPEC+ after a productive weekend meeting.
Monday’s rally is a continuation from last week, with Occidental stock rising more than 33% on Friday alone. For the week, shares gained 60.5%, although the stock is still about 50% below its 2020 high.
Let’s look at the charts to see where this stock could go next.
Trading Occidental Petroleum Stock
The 23.6% retracement and downtrend resistance (blue line) were keeping a lid on Occidental stock for about three months. On Thursday, shares approached the latter of these two levels and on Friday, shares gapped above both of them.
The follow-through we’re seeing on Monday is sending shares above the 38.2% retracement and the declining 100-day moving average. For the stock to just now reclaim the 38.2% retracement after seeing how far it’s rallied over the past two days shows just how beaten down it’s been.
From here, bulls will want to see OXY stock hold the 100-day moving average as support.
If it can, Occidental stock may be able to fill the March gap up toward $26. That would be very constructive if it could do both — that is, fill the gap and hold the 100-day.
Above $26 puts the 50% retracement in play near $28, followed by the 200-day moving average and 61.8% retracement near $32.
On the downside, a break below the 100-day moving average could put the 23.6% retracement back in play near $18.
Admittedly, these are some pretty wide ranges, but investors must realize that Occidental Petroleum suffered an 80.5% peak-to-trough decline in 2020. The ensuing moves — whether it’s a robust rebound or a break of support — can lead to rapid price changes in both directions.
For now, keep an eye on $26 on the upside and $22 on the downside.