- Posted by Greg Harmon
- on October 25th, 2021
Here is your Bonus Idea with links to the full Top Ten:
Occidental Petroleum, $OXY, went through two shallow pullbacks over the past 8 months. The second one led to a Cup and Handle pattern, and it is close to triggering. That would give a target to 46.75. The RSI is strong in the bullish zone with the MACD level after a cross down. The Bollinger Bands® are squeezing in, often a precursor to a move.
There is resistance at 34.25 then back to 2019 at 37.50 and 41.80 before 47. Support lower comes at 32.80 and 31.50 then 30.40 and 28. Short interest is moderate at 3.3%. The stock pays a dividend with an annual yield of 0.12% and has traded ex-dividend since September 9. The company is expected to report earnings next on November 4th. The November 5 expiry options chain shows an expected move of $2.85 by expiry or 8.4%. It has highest open interest at the 30 put and at the 34 call followed closely by the 35 and 32 call.
In the November monthly expiry open interest is high from the 35 down to the 20 put strikes, biggest at the 25 and 31. On the call side it is bigger from 31 to 35, biggest at 35. December options show much more open interest on the call side and biggest at the 30 and then 35 and 40 strikes. The January options have biggest open interest at the 25 put and the 30 and 40 calls.
Occidental Petroleum, Ticker: $OXY
Trade Idea 1: Buy the stock on a move over 34.25 with a stop at 32.80.
Trade Idea 2: Buy the stock on a move over 34.25 and add a November 5 Expiry 33/30 Put Spread (80 cents) while selling the November 37 Calls (83 cents).
Trade Idea 3: Buy the November 5 Expiry/December 36 Call Calendar ($1.15) will selling the November 5 Expiry 30 Put (25 cents).
Trade Idea 4: Buy the January 30/35/40 Call Spread Risk Reversal (free).
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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with one week left in October, saw equity markets with continued strength.
Elsewhere look for Gold to continue its short term consolidation while Crude Oil continues in an uptrend. The US Dollar Index to pullback in the short term uptrend while US Treasuries consolidate in the downtrend. The Shanghai Composite looks to continue to mark time in a broad range while Emerging Markets pullback in a long term uptrend.
The Volatility Index looks to remain very low making the path easier for equity markets to the upside. The charts of the SPY and QQQ continue to look strong, especially on the longer timeframe. On the shorter timeframe the QQQ looks in for a pause. The IWM remains stuck in broad consolidation but with some positive progress at the top of the recent range. Use this information as you prepare for the coming week and trad’em well.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.