Occidental stock – one to watch where patience is required

This is a new stock recently added to our watchlist but is one where patience is required. This is the weekly chart and as can be seen, OXY has been in a protracted period of consolidation with the stock even moving into single figures before finding some traction and returning to the volume point of control (VPOC) at $13.00 per share before climbing further on rising volume. Since December a congestion phase has been building before the price action triggered a volatility signal which pushed OXY to $25.38. The consequence of this signal is either further congestion or a reversal back to the support at $18.22 which is the low of the volatility candle. However, there is no reason to suppose this stock cannot regain the highs of 2020 which saw it at $48 per share but in order to achieve this, there is both good news and bad news.

First, from the perspective of the vpoc (volume on the y axis), there is little in the way of resistance ahead. As we can see, we have a low volume region between $25 and $36 per share before the histogram deepens as we approach the $38 to $46 per share area. However, even at this level, the volume here is light compared to the current price level and so from a volume perspective, this should provide little in the way of resistance to any move higher.

However, the same cannot be said of price-based resistance where we have two well-developed regions ahead. The first is at $30 per share and the second close to $40 per share. Of these, it is the first which is significant as it has been tested and held 12 times to date and is denoted with the blue dashed line. This is one of the great features of the accumulation and distribution indicator for NinjaTrader which presents these levels according to their relative strength and so gives us a visual picture of strength and weakness on all timeframes.

So with a current price of $21.14 per share, OXY does has some way to go, but patience is required along with volume.

By Anna Coulling

Charts from NinjaTrader and indicators from Quantum Trading