Legendary investor Warren Buffet is pouring billions of dollars into Occidental Petroleum Corporation ! when it rejected heavily from strong and valid down trend line ! why ?
Please note Buffett is a long term investor not a trader !. US market has been in a Bull run in large time frames (Yearly or Monthly) since 1932 therefore, any long term investor who chose fundamentally powerful stock has made a huge profit.
Although I believe Berkshire could have chosen better time and maybe lower price to start buying shares of OXY, I think it will see higher prices in long term in fact, It goes much higher than ATH and will reach to around 180 USD per share or even higher in up coming YEARS.
Now , lets look at what we have in technical point of view:
1. OXY was rejected strongly from valid down trend line in weekly time frame for 4th time. Break out of this heavy down trend line is very important for the stock to go higher.
2. In terms of Elliott waves, similar to many other energy stocks like XOM, COP, SLB and etc , OXY has completed and ascending complete wave cycle from IPO to latest major low (Primary degree waves 1 and 2 on the chart shown by green and red arrows respectively ). It means that impulsive section (Primay degree wave 3) of new wave cycle has been started at last major low around 9 USD. In closer look, currently we are in wave 4 of 1 of primary degree wave 3. Elliott wave labeling on the chart shows internal waves (12345) of wave 1 of primary degree wave 3. It means there is one more leg up ( wave 5 shown on the chart ) to complete wave 1 of primary degree wave 3. Then we will probably have a major correction (wave 2 of 3 ) down to 40-50 level and after completion of correction , wave 3 of 3 which is most profitable and most speedy wave will start. Please note this is most probable scenario and we are not talking about certainty.
3. Beside strong down trend line, there are many strong static resistances on OXY climb road. These Resistances are shown by red horizontal lines on the chart. Therefore, OXY will face difficulties on the way to reach it's target.
One more important note :
As Berkshire owns now around 20 % of company shares and they are long term holders, We can somehow be sure that 20 % of shares of company will be out of future sell pressure in up coming years which is very important note to be considered.
All in all, I believe OXY , like many other energy stocks , offers huge profit for long term investor and traders. However, Is it a right time to open a long position? It depends on personality and risk management and patience of investors/traders. I myself, keep OXY in my watch list and think it can be bought on lower prices as shown by green lines. To me, buying a stock when it is struggling with a strong down trend line is dangerous and as always, I am seeking for a safe trade set up.
I Hope this publication to be useful and wish you all the best.
@the_sunship, Simply may be they do not believe in technical analysis.
the_sunship
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@SaeedSajedi, they should, he's gonna get his ass handed to him
SaeedSajedi
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@the_sunship, Agree. I cannot understand how they can spend billions of dollars without considering simple technical concepts.
RonLegend_1
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@the_sunship, so a multi billionaire should listen to a guy who can't even make 100k per year?
Thinus5422
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Thank you for valuable info and analysis. Expect higher crude oil prices from beginning of 2023. Looks like excellent long term investment. May not be a bad idea to follow mister Buffet.
SaeedSajedi
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@Thinus5422, You are welcome my friend. I still keep watching and believe they chose right stock but wrong time. For long term investment, things are different. Wish you success in your investment.
AwesomeAvani
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Buffet is long term. He is betting the whole alternative energy thing will stagnate when the market growth is impaired by inflation. In the meanwhile XOY and others are cash rich ( well endowed) and can weather the storm. I see OXY in a downward pointing megaphone pattern demonstrating rising volatility such as what occurred Friday after the Buffet buy and now today. I will trade up on the bottom of the megaphone trendline go short when current market price reaches the top of the megaphone and watch for bounces or pops when in the volatile area of the megaphone's midline. See also my idea uploaded yesterday pasted inline below :
SaeedSajedi
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@AwesomeAvani, Thanks for comment and sharing your chart and idea.