Occidental Petroleum (NYSE: OXY) fell 54% from its 2022 peak in a three-wave zigzag move. This drop formed wave (II), with a low at $34.78 in April 2025.<\/p>\n
After that low, the share price began rising in a new impulsive pattern. It is now nearing the end of its first five-wave advance within wave I.<\/p>\n
Using a 61.8% Fibonacci extension, the target area is $77\u2013$87. A move above the wave (I) high would confirm a new weekly upward sequence.<\/p>\n
If that confirmation occurs, price targets move to the $103\u2013$119 equal-legs zone. The analysis also projects a move towards new all-time highs.<\/p>\n
Further acceleration is linked to the start of wave III of (III). The expectation is for stronger upward movement once that wave begins.<\/p>\n
Following the bottom we saw back in April 2025 at $34.78, Occidental has been on a strong upward trend. The stock is now approaching the upper end of its initial target zone of $77-$87, which is a key milestone for this first rally. This move is fundamentally supported by WTI crude prices, which have recently stabilized above $95 per barrel due to persistent global supply concerns.<\/p>\n
For derivative traders, this suggests a potential consolidation period in the near term before the next major advance. Considering this, selling out-of-the-money puts with strike prices around $75 or $80 could be a strategy to collect premium while waiting for the next move. Any short-term weakness in the coming weeks could also present an opportunity to purchase call options at a better price.<\/p>\n
The real opportunity appears to be in positioning for the powerful wave III, which targets the $103\u2013$119 area. We believe this makes buying call options with 3 to 6 months of duration, such as the September 2026 $95 or $100 calls, an attractive way to capture this anticipated acceleration. This longer timeframe allows for the full bullish sequence to develop without suffering from rapid time decay.<\/p>\n
This technical view is reinforced by Occidental\u2019s strong performance, having beaten earnings expectations for the fourth quarter of 2025 with reported free cash flow of over $2.1 billion. From a historical perspective, the current implied volatility of around 35% remains below the peaks over 50% that we witnessed during the 2022 energy spike. This suggests that options are still reasonably priced relative to the stock’s potential for explosive moves.<\/p>\n
In the immediate weeks ahead, the key signal to watch is a definitive break and hold above the recent wave (I) high, which is currently near $87. Confirmation of this breakout would validate the entire bullish structure, likely attracting a new wave of buying. Therefore, setting alerts for this price level is critical for timing the entry into more aggressive bullish positions.<\/p>\n
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