Occidental’s Stock Price Range Forecast in Mid-August
As of August 18, 2017, Occidental Petroleum (OXY) had an implied volatility of ~22.98%, which is higher than its implied volatility of ~22.78% on August 11, 2017.
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Weekly price range forecast
Based on its implied volatility of ~22.98% and assuming a bell curve model (or normal distribution of prices) over 365 days in a year and a standard deviation of one, OXY stock is expected to close between $61.03 and $57.27 in the next seven calendar days. OXY stock should stay in this range 68% of the time, based on the standard statistical formula.
As of August 18, 2017, the SPDR S&P 500 ETF (SPY) had an implied volatility of 21.5%. In the past two weeks, SPY’s implied volatility has risen from 8.7% to 21.5%.
Remember, implied volatility can’t forecast a stock’s future direction. It’s derived from option pricing model, which means that the data is theoretical, with no guarantee of correctness.
OXY’s moving averages
On August 18, 2017, OXY was trading below its 200-day and 50-day moving averages. On August 18, OXY’s stock price closed at $59.15, while its 200-day and 50-day moving averages stood at $63.43 and $60.45, respectively. This means that OXY’s 50-day moving average stands below its 200-day moving average, which is technically a bearish sign.
By comparison, Marathon Oil (MRO), Southwestern Energy (SWN), and Devon Energy (DVN) have implied volatilities of ~35.4%, ~49.6%, ~21.9%. Southwestern Energy (SWN) and Devon Energy have shown considerable declines in their implied volatilities, compared with ~56.6% and ~34.3%, respectively, on August 11, 2017.
Notably, the First Trust Natural Gas ETF (FCG) invests in natural gas producers, whereas Energy Select Sector SPDR ETF (XLE) generally invests at least 95% of its total assets in oil and gas companies.