Occidental Petroleum Outlook - A Stock on Weak Technical Ground

Market Snapshot

Occidental Petroleum (OXY) is in a bearish technical phase with a current price drop of -5.37%. Investors should be cautious due to the poor technical outlook.

News Highlights

Recent developments in the energy sector have the potential to impact OXY’s trajectory:

• Colombia's energy boost: Colombia's investment in oil and gas E&P is expected to increase by 8% in 2025, reaching $4.68 billion. This could indirectly benefit OXY if global oil demand surges.
• Nigeria’s new executive order: Nigerian President Bola Tinubu has introduced incentives to lower project costs and attract investment in the oil and gas sector. This could support exploration efforts in emerging markets where OXY has exposure.
• OPEC+ output increases: OPEC+ plans to increase oil output by over 411,000 barrels per day in July. A stronger global supply could affect oil prices and indirectly impact OXY's profitability.

Analyst Views & Fundamentals

The average rating score for OXY over the last 20 days is 3.00, while the performance-weighted rating score is 4.12. These scores indicate a generally moderate level of optimism among analysts, though there is significant dispersion in views. This dispersion contrasts with the recent 5.37% price drop, which suggests market expectations are not fully aligned with the price action.

Here are the key fundamental factors and their internal diagnostic scores (0-10):

• Net profit margin: -22.49% (Score: 3)
• Return on assets: 15.66% (Score: 3)
• Price-to-book ratio: 38.06% (Score: 3)
• Inventory turnover days: 74.08 days (Score: 2)
• Long-term debt to working capital ratio: 95.93% (Score: 3)
• Profit-to-market value: 66.60% (Score: 0)

Money-Flow Trends

Despite the negative technical signals, fund-flow patterns show a mixed picture. The overall trend in money flow is negative, with large and extra-large institutional investors showing a negative trend. However, small retail investors are showing a positive trend, with 50.62% of inflows coming from this group. The block-inflow ratio is at 49.13%, which indicates that big money is cautious or moving out. In short, while small investors are optimistic, large players are hesitant.

Key Technical Signals

The technical outlook for OXY is weak, with a technical score of 2.78. Among the 8 analyzed indicators, 7 are bearish and 0 are bullish, leading to the conclusion that the stock should be avoided for now.

Key internal diagnostic scores for recent signals (0-10):

• RSI Overbought: 1.39 — a strong bearish signal
• Ex-Dividend Date: 1.40 — often a weak day for the stock
• Dividend Record Date: 1.40 — similar caution is warranted
• Bullish Engulfing: 1.44 — ironically, this bullish candle pattern has a very low score
• WR Overbought: 3.08 — a moderate bearish signal

Over the last five days, notable chart patterns include the RSI Overbought on September 2nd and WR Oversold on September 9th, but these have not been strong enough to reverse the bearish trend.

Conclusion

Investors should consider avoiding OXY for now due to the weak technical signal and conflicting analyst and price trends. While some fundamentals like the net profit margin and inventory turnover remain reasonable, the overall momentum is clearly bearish. It may be wise to wait for a pullback or clearer signs of strength before considering a position in this stock.