Occidental Petroleum (OXY) PriceWatch Alert Support Down To $72.58

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Petroleum (NYSE: OXY) closed yesterday at $77.00. So far the stock has hit a 52-week low of $50.66 and 52-week high of $100.04. Occidental Petroleum stock has been showing support around 72.58 and resistance in the 82.34 range. Technical indicators for the stock are Bearish and S&P gives OXY a neutral 3 STAR (out of 5) hold rating. OXY appears on the Investors Observer Momentum Plays list. For a hedged play on this stock, look at a Nov ‘08 80 covered call (OXY KP) for a net debit in the $69.60 area. That is also the break even stock price for this trade. This covered call has a 128 day duration, provides 9.61% downside protection and a 14.94% assigned return rate for a 42.61% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the OXY Jan ‘09 65 Call (OXY AM) and selling the Nov ‘08 80 call (OXY KP) for a $9.50 debit. The trade has a 128 day life and would provide 3.25% downside protection and a 57.89% assigned return rate for a 165.00% annualized return rate (for comparison purposes only). Occidental Petroleum does not pay dividends at this time.

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