NEW DIRECTIONAL CALL PLAYS
Occidental Petrol. - OXY - close: 88.49 change: +0.08 stop: 83.45
Oxy engages in oil and gas exploration and production through its subsidiaries in three core regions of the world: the United States, Middle East/North Africa and Latin America. Oxy's Midstream, Marketing and Other segment comprises business units that gather, process, transport, store and market crude oil, natural gas, natural gas liquids and carbon dioxide. Glenn Springs Holdings, Inc., a wholly owned subsidiary of Occidental Petroleum Corp., manages historical environmental and operational sites for various Oxy entities with a focus on Oxy's commitment to the protection of health and the environment. OxyChem, a wholly owned subsidiary, is a leading North American manufacturer of polyvinyl chloride (PVC) resins, chlorine and caustic soda â€“ key building blocks for a variety of indispensable products such as plastics, pharmaceuticals and water treatment chemicals. (source: company press release or website)
Why We Like It:
Oil stocks have been enjoying strength thanks to a rally in the price of crude oil. Shares of OXY have been a relative strength leader in the group with a bullish breakout over major resistance at the $85.00 level. Now oil is nearing potential resistance and could see a little correction. I am suggesting we take advantage of any short-term weakness in shares of OXY and use it as an entry point to buy calls.
Broken resistance near $85.00 should be new support. I'm listing a trigger to buy calls at $85.50. We'll use a stop loss at $83.45. If triggered our first target is $89.75. We'll use a longer-term target at $94.00 but this could take several weeks to achieve.
Trigger to buy calls at $85.50
Suggested Position: BUY CALL MAY $85.00 (OXY 10E85.00) current ask $5.35
Entry on April xxth at $ xx.xx
Earnings Date 04/29/10
Average Daily Volume = 5.5 million
Listed on April 6th, 2010