OXY Plummets Over 4%—What’s Driving the Selloff?

• OXY shares slumped 4.89% to $42.87, hitting an intraday low of $42.48.
• Analysts at Roth MKM and Wells Fargo cut price targets, citing mixed sector outlooks.
• Q2 earnings showed revenue growth to $6.8B, but net profit dipped 1.2% sequentially.
• Technicals show a breakdown below the 50-day MA ($43.18), testing psychological support at $42.

The sell-off marks OXY’s worst single-day drop in months, fueled by profit-taking and downgrades amid a choppy energy sector landscape.

Downgrades and Earnings Hesitation Spark the Slide
The sharp decline traces directly to a confluence of analyst actions and technical saturation. Roth MKM’s ‘Hold’ with a $42 target—below current levels—signaled skepticism about OXY’s valuation. Wells Fargo’s $46 price target cut, coupled with Scotiabank’s $45 ‘Hold,’ created a wall of resistance. While Q2 revenue rose 13.9% annually, net profit dipped slightly to $936M, reflecting margin pressures. Traders interpreted this as evidence of execution challenges in OXY’s Permian-heavy portfolio, accelerating profit-taking as the stock approached its $45.24 200-day MA.

Energy Sector Mixed—COP Holds Steady Amid Ranges
While OXY’s decline was sharp, sector peers like COP (-1.43%) and XOM (-0.8%) traded in muted ranges, suggesting the selloff is OXY-specific. The broader upstream sector faces headwinds from flat WTI prices ($73.46) and lingering OPEC+ policy uncertainty. OXY’s outperformance in Permian assets hasn’t insulated it from analyst rotations favoring more balanced E&P names like DVN or EOG.

Bearish Puts and Technical Levels to Watch
OXY20250725P42 and OXY20250725P41.5 dominate liquidity.
• 200-day MA: $47.06 (resistance)
• RSI: 55.34 (neutral)
• Bollinger Bands: Upper $47.36 / Lower $41.43 (price tests lower band)

The 50-day MA ($43.18) now acts as critical resistance. Below $42.50, support dissolves toward $40.50—the 2024 low. Aggressive traders should target the OXY20250725P42 put (volume 2,680) with 76.34% leverage and delta -0.35. Its theta (-0.0018) and gamma (0.163) offer time decay resilience and volatility capture. The OXY20250725P41.5 (volume 6,744) offers 101.79% leverage with delta -0.28—ideal for a 5% downside scenario. Both contracts benefit from implied volatility clustering at 32-35%, offering premium stability.

Action Hook: “Bulls need a close above $43.50 to stabilize—until then, P42/P41.5 puts remain top bearish plays.”

Backtest Occidental Petroleum Stock Performance
The backtest of OXY's performance after a -5% intraday plunge shows favorable results, with win rates and returns indicating a positive short-to-medium-term outlook.1. Event Frequency and Win Rates: - The event occurred 625 times over the backtested period. - The 3-day win rate was 51.20%, the 10-day win rate was 52.96%, and the 30-day win rate was 50.88%.2. Returns: - The average 3-day return following the event was 0.06%. - The average 10-day return was 0.17%, and the average 30-day return was 0.26%. - The maximum return during the backtest was 0.39%, achieved on day 29.3. Conclusion: OXY has historically shown a higher probability of positive returns in the immediate aftermath of a -5% intraday plunge. While the returns are modest, the consistency over short-to-medium terms suggests the strategy could be beneficial for traders looking to capitalize on such events.

OXY Faces Crossroads—Hold or Fold?
The selloff underscores OXY’s valuation dilemma amid sector consolidation. While institutional ownership (88.7%) remains stable, analyst consensus at ‘Hold’ with a $53.57 target suggests patience is required. COP’s resilience (-1.43%) highlights the sector’s bifurcated landscape—permian-heavy names like OXY face margin scrutiny while integrated peers thrive. Watch for Q3 production updates and Fed policy shifts—failure to reclaim $43.50 risks a deeper slide toward $40. Investors should prioritize downside protection until OXY proves its Permian thesis in a $70s oil environment.