Occidental Petroleum Shares Surge on Berkshire Acquisition Rumors and 'Golden Cross' Pattern
Occidental Petroleum (OXY) shares surged on Wednesday following rumors of a potential $10 billion acquisition of its petrochemical division, OxyChem, by Berkshire Hathaway (BRK.A)(BRK.B). This news, coupled with the formation of a bullish 'golden cross' pattern in OXY stock, has investors optimistic about the company's future prospects.
The 'golden cross' pattern, where the 50-day moving average crosses above the 200-day moving average, typically signals a longer-term uptrend. This recent development, after a period of consolidation, has sparked investor confidence. OXY shares have already risen by over 35% from their April low, including today's gains.
The potential sale of OxyChem to Berkshire Hathaway would not only be the conglomerate's largest acquisition since 2010 but also its second major investment in the chemicals sector in nearly 15 years. OxyChem's attractive revenue stream of approximately $5 billion annually makes it a compelling asset for Berkshire's portfolio. Moreover, this transaction could significantly reduce Occidental Petroleum's debt burden, currently standing at $24 billion.
While Wall Street's consensus rating on Occidental Petroleum stock remains a 'Hold', with predicted upside of only 5%, the combination of the golden cross pattern and the potential OxyChem sale creates a compelling setup for potential upside in OXY shares. Investors will eagerly await further developments regarding the rumored acquisition.
