Warren Buffett's Berkshire Hathaway (BRK.A) , (BRK.B) reported that the investment vehicle added more Occidental Petroleum (OXY) shares, lifting its stake to 23.1%.
Let's check out the charts and indicators.
In this daily bar chart of OXY, below, I can see a downtrend playing out from early November. Prices have been making lower highs and lower lows for more than four months. OXY trades below the declining 50-day moving average line and below the cresting 200-day moving average line. The On-Balance-Volume (OBV) line has declined from November telling me that (surprisingly) that sellers are being more aggressive than buyers. The people doing the buying for Buffett are skilled enough to only act on the bid side in a weak market. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of OXY, below, I see a mixed picture. Prices have rolled over the past few months. OXY trades below the declining 40-week moving average line. The weekly OBV line shows weakness from November. The MACD oscillator has weakened from June and is now in sell territory below the zero line.
In this daily Point and Figure chart of OXY, below, I can see a nearby downside price target in the $55 area.
In this weekly Point and Figure chart of OXY, below, I can see a downside price target in the $50 area.
Bottom line strategy: Warren Buffett is not like most investors. He has a longer-term vision of valuation and companies. Warren has deep pockets and can afford to buy weakness. Despite his recent purchases of OXY, it looks like prices can weaken a bit further.
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