During Monday's Mad Money program, Jim Cramer pointed out to viewers the gains in the oil patch, with stocks like Occidental Petroleum ( OXY) which rallied 6.6%. Let's check and see if the charts are showing more than limited improvement.
In this daily bar chart of OXY, below, we can see that prices briefly broke below the rising 200-day moving average line in August but recovered and successfully retested the line again this month.
The On-Balance-Volume (OBV) has been steady since the middle of July and it looks like selling did not increase on the August price decline telling us it was a temporary "shake out" that did not attract serious liquidation.
The MACD oscillator gave a cover shorts buy signal last month and is now just below the zero line and a potential outright buy signal.
In this weekly Japanese candlestick chart of OXY, below, we can see the "bigger picture" of the last three years. Prices suffered a huge decline but have tripled off the nadir. We can see how prices have tested the rising 40-week moving average line.
The weekly OBV line is holding steady. The MACD oscillator is still above the zero line and narrowing.
In this daily Point and Figure chart of OXY, below, we can see an upside price target in the $32 area.
In this weekly Point and Figure chart of OXY, below, we can see a tentative $47 price target.
Bottom line strategy: Some investors may be shying away from stocks like OXY but if there is a successful trade to be made we should consider it. Aggressive traders could go long OXY at current levels risking to $21.50. $32 and then $47 are our price targets.
