Occidental Petroleum (OXY) Drops 3.57% in Two Days as Technical Indicators Signal Extended Downtrend

Occidental Petroleum (OXY) has experienced a 3.50% decline on the most recent session, marking the second consecutive day of losses with a cumulative drop of 3.57%. This recent bearish momentum, coupled with historical data from the past year, provides a robust foundation for technical analysis across multiple frameworks.

Candlestick Theory

The price action suggests a bearish bias, with recent candlesticks forming lower highs and lower lows, indicative of a descending channel. Key support levels are emerging around the $43.65–$44.00 range, where multiple sessions have tested this area without breaking through. A potential bearish reversal pattern, such as a "Bearish Engulfing" or "Dark Cloud Cover," could materialize if the price closes below the $43.65 level, reinforcing the likelihood of further downside. Resistance remains anchored near $45.39–$45.50, where previous attempts to rally stalled.

Moving Average Theory

Short-term moving averages (50-day and 100-day) are currently below the 200-day MA, forming a bearish "death cross" configuration. The 50-day MA has been trending downward, intersecting with the 100-day MA in a bearish crossover. This alignment suggests sustained bearish momentum, with the 200-day MA acting as a critical long-term resistance at approximately $44.50–$45.00. If the price fails to reclaim these moving averages, the downtrend may persist for several weeks.

MACD & KDJ Indicators

The MACD histogram has turned negative, with the MACD line crossing below the signal line, confirming bearish momentum. The KDJ (Stochastic) oscillator shows the %K line dipping below the %D line in oversold territory (<20), which may signal a short-term bounce. However, a divergence between the KDJ's upward divergence and the price’s continued decline suggests the oversold condition may not trigger a meaningful reversal, as bearish fundamentals dominate.
Bollinger Bands
Volatility has contracted recently, with the bands narrowing, indicating a potential consolidation phase before a breakout. The price currently hovers near the lower Bollinger Band ($43.65–$43.80), which, in a downtrend, may validate continued weakness. A break below this band could trigger further volatility, while a rebound above the middle band ($44.15–$44.30) might hint at temporary stabilization.

Volume-Price Relationship

Trading volume has surged during recent declines, particularly on the 3.50% drop, validating the bearish move. However, volume has trended lower during recent rallies, suggesting waning buying interest. This asymmetry supports the sustainability of the downtrend, as bearish volume confirms weakness while bullish volume lacks conviction.

Relative Strength Index (RSI)

The 14-day RSI stands at 28, firmly in oversold territory. While this often signals a potential rebound, the RSI remains below 30 for an extended period, which is common in strong downtrends. A divergence between a rising RSI and falling price could foreshadow a reversal, but without a confluence of other bullish signals, this is more likely a false signal.

Fibonacci Retracement

Applying Fibonacci levels from the recent high ($48.03 on 2025-10-02) to the low ($38.81 on 2025-05-12), the 61.8% retracement level aligns with $43.65, a critical support zone. The price’s repeated testing of this level increases the probability of a breakdown, with the next target at the 78.6% level ($39.81). A break above $44.50 (the 50% retracement) would suggest a potential consolidation phase.

Confluence and Divergences

A strong confluence of bearish signals—descending moving averages, bearish MACD, and oversold RSI in a downtrend—supports the continuation of the decline. However, the KDJ’s oversold reading and Bollinger Band contraction introduce ambiguity, as these could hint at a short-term bounce. The absence of bullish divergence in RSI or KDJ mitigates the risk of a false reversal.

The analysis underscores a high probability of further downside in the near term, with key support at $43.65 and resistance at $44.50. Traders should monitor volume during potential bounces and watch for a breakdown below $43.65 to confirm the continuation of the bearish trend.