Stock Analysis | Occidental Petroleum Outlook - A Bearish Signal Amid Mixed Fundamentals

Market Snapshot

Headline takeaway: Occidental Petroleum (OXY) is flashing a red flag on the technical front with a weak score of 2.18 and a clear bearish bias, even as fundamentals show mixed signals. Investors should proceed with caution.

News Highlights

Here are the latest news items impacting the oil and gas sector, which could indirectly affect OXY:

• Colombia's E&P investment expected to rise by 8% in 2025. This suggests a growing appetite for upstream exploration, which could increase global supply and put pressure on oil prices, indirectly affecting OXY.
• President Tinubu of Nigeria introduces cost efficiency incentives for oil and gas operations, which could boost production efficiency in key markets. This could lead to more competition in oil prices, affecting OXY’s margins.
• Private equity exits in fossil fuels are rising, surpassing 2024 levels. This trend shows strong liquidity in the sector, which could mean increased merger and acquisition activity—potentially affecting OXY's valuation and strategy.

Analyst Views & Fundamentals

The current analyst landscape for OXY is somewhat mixed. Three institutions have weighed in over the past 20 days, with a simple average rating of 3.00 and a performance-weighted rating of 1.19. This indicates a disagreement in sentiment, with UBS being the only firm with a decent historical win rate (57.1%) compared to the other two, which have zero win rates.

What’s more, the average rating is at odds with the stock's price trend, which has risen by 9.30% recently. Analysts appear to be pessimistic while the market is bullish—this could signal either a correction or a temporary divergence.

Key Fundamental Factors

• Net profit attributable to parent company shareholders / Net profit (%): 74.59% — internal diagnostic score: 3.00
• Inventory turnover ratio: 2.43 — internal diagnostic score: 3.00
• Net income / Revenue: -0.22% — internal diagnostic score: 3.00
• Net cash flow from operating activities / Total liabilities (%): 10.60% — internal diagnostic score: 3.00
• Long-term debt to working capital ratio (%): 95.93% — internal diagnostic score: 1.00
• Total assets turnover ratio: 15.66% — internal diagnostic score: 2.00
• Asset-MV: 1.35 — internal diagnostic score: 6.00

Money-Flow Trends

Money flows tell a nuanced story. Large and extra-large investors are showing positive inflows, with inflow ratios of 49.60% and 50.32%, respectively. Meanwhile, retail investors are showing a more mixed picture, with small investors showing a positive trend (50.34%) and medium investors a negative one (49.05%). The fund flow score is 7.84, labeled as “good,” suggesting that institutional confidence remains intact even as technical indicators warn of a possible correction.

Key Technical Signals

Technically, OXY is flashing three bearish signals and no bullish ones in the last five days. The internal diagnostic score is 2.18, which is a clear warning of a weak trend.

• Williams %R Overbought — internal diagnostic score: 3.25 (neutral bias but high volatility)
• RSI Overbought — internal diagnostic score: 1.86 (biased bearish, with historical underperformance)
• Bullish Engulfing — internal diagnostic score: 1.44 (a bearish trap, with poor historical returns)

Recent chart patterns show repeated signs of overbought conditions, particularly from Williams %R and RSI in late August. This is a classic sign of exhaustion and could lead to a pullback.

Conclusion

OXY is showing strong institutional inflows and mixed fundamentals, but the technical indicators are clearly bearish. With an internal diagnostic score of 2.18 and three negative signals, the risk of a pullback is high. While the fundamentals don’t entirely paint a bleak picture, investors should avoid initiating new long positions at this time. Instead, consider waiting for a clearer breakout or a pullback to a more attractive technical level before making a move.