Oil Stock Slumps After Buffet Dispels Buyout Rumors

OXY is today eyeing its fifth loss in six sessions

Digital Content Manager
May 8, 2023 at 10:54 AM
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Occidental Petroleum Corporation (NYSE:OXY) stock is down 2.1% to trade at $59.42 at last check, after Warren Buffett dispelled rumors that Berkshire Hathaway (BRK.A) had plans to buy the oil concern. Buffet reiterated happiness with Berkshire's majority stake of 23.6% in the company, though.

The $58.50 level last week contained Occidental Petroleum stock's pullback from the $66 area, but the 20-day moving average has been acting as resistance since late April. Now on track for its fifth loss in six sessions, OXY has shed more than 21% in the last six months.

This negative price action comes ahead of the company's first-quarter financial report, due out after tomorrow's close. OXY has a dismal post-earnings trading history, finishing seven of eight next-day sessions lower, including a 9.2% drop in November. The shares averaged a 3.7% move over the last two years, regardless of direction, but this time the options pits are pricing in a much bigger-than-usual swing of 5.4%.

Options traders lean have been firmly bearish toward the equity, per its 10-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than all but 4% of readings from the last 12 months. 

Today's options pits paint a different picture, though, with 13,000 calls across the tape so far, which is double the intraday average volume. Most popular by far is the weekly 5/12 63-strike call.

 

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