Occidental Petroleum (OXY) shares experienced a notable increase on Wednesday, fueled by speculation that Berkshire Hathaway (BRK.A) (BRK.B) is considering acquiring its petrochemical division, OxyChem, for approximately $10 billion. This news has sparked investor interest, as OXY’s stock has seen a remarkable rise of more than 35% from its year-to-date low recorded in April.
A key technical indicator contributing to the positive momentum is the formation of a golden cross, which occurred for the first time since April 2024. This pattern arises when the 50-day moving average crosses above the 200-day moving average, typically signaling the start of a longer-term upward trend in stock prices. In the case of Occidental, this golden cross gains additional significance because it coincides with the potential sale to Berkshire Hathaway. Historically, such technical formations are considered more reliable after a period of consolidation, which OXY has recently experienced.
The convergence of moving averages occurred during a phase of relatively low volatility, potentially setting the stage for sustained price movement. If the deal with Berkshire progresses, it could represent a strategic shift for Occidental, particularly in terms of alleviating its considerable debt burden, which currently stands at $24 billion. This acquisition would mark Berkshire’s largest investment since its $11.6 billion purchase of Alleghany and would enhance the conglomerate’s existing relationship with Occidental, where it holds about a 28% stake valued at nearly $13 billion.
Moreover, OxyChem has shown robust performance, generating approximately $5 billion in revenue for the 12-month period ending June 2025, positioning it as an attractive asset for Berkshire’s expanding portfolio. The technical strength indicated by the golden cross, coupled with the allure of the OxyChem sale, suggests a promising outlook for Occidental’s stock in the near future.
However, it’s worth noting that despite these bullish indicators, Wall Street analysts remain cautious, expressing skepticism about significant upside potential for OXY shares. While the current developments are encouraging, investors should maintain a balanced perspective as they navigate the stock’s future trajectory.