Occidental Petroleum (NYSE:OXY) has been swinging higher in recent sessions, likely on political catalysts. With former President Donald Trump enjoying strong reelection momentum, his pro-fossil-fuel stance may lift OXY stock. Because of this, it might make sense for speculators to consider November expiry call options.
While it’s difficult to predict what “The Donald” would do in a possible second term, his own words provide a picture of intent. According to The New York Times, Trump has promised to turn back the clock on President Joe Biden’s electric vehicle policies. The former real estate mogul and television star even threatened, “you won’t be able to sell those cars.”
This sentiment represents a lifeline for legacy auto manufacturers. In turn, whatever’s good for these enterprises will be good for the petroleum industry. A Trump administration will almost certainly push for domestic oil and gas production.
This would be music to the ears of Occidental and anyone invested in OXY stock.
Technical Indicators Point to Tailwinds for Occidental Petroleum
First, TipRanks noted that Occidental represented one of the most actively traded stocks on Wednesday. According to Yahoo Finance, the average volume of OXY stock over the past three months sat at 6.74 million shares. However, during the midweek session, volume spiked to 7.89 million shares, up 17%.
Second, during this high-volume session, OXY stock charted a white (or green) candlestick with a small upper wick or shadow. In other words, the gap between the closing price and the intraday high was very narrow. On the other hand, Wednesday’s candlestick featured no lower wick or shadow. That means from the get-go, the bulls charged in and sent shares higher.
There was never any question about testing support lines; rather, it was all about attempting to push above upper resistance barriers. That’s awfully bullish for OXY stock.
Trade of the Day: Buy November Expiry Call Options
For the Trade of the Day, I’m really only thinking about one logical trade: Buying the 2024 Nov 15 $65 call option. This gives investors plenty of time to digest November election results.
Prior to this expiration date, however, the bulls may wish to speculate on OXY stock on this familiar adage: Buy the rumor, sell the news. I don’t think it makes sense to buy Occidental shares post-election since big gains rarely materialize on established facts. Instead, traders may see the biggest rewards from anticipated facts.
Once the anticipation becomes reality, the narrative is no longer interesting, for lack of a better word. Still, the risk here is that anything can happen in this race. However, if you are feeling confident about a Trump victory, then OXY stock appears extremely enticing.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
