Warren Buffett just bought the dip in Occidental Petroleum. Here are the chart levels to know now.

Occidental Petroleum  (OXY) – Get Occidental Petroleum Corporation Report was up nicely on the day, with a 4.5% gain at the highs on Thursday. However, those gains were cut to just 0.56% at the close as energy prices remain volatile. 

That initial rally came on reports that Warren Buffett was again buying more stock. According to a recent SEC filing, Buffett upped his stake by more than $500 million last week.

That brings his total holdings to more than $8.5 billion, good for a 16% stake in the company. Buffett first started buying back in March and has continued to accumulate the stock along the way.

That said, the recent correction in energy prices — with oil down 15.5% from last week’s high and natural gas futures down 36% from its high on June 8 and almost 9% today — has weighed on Occidental Petroleum.

In general though, it has weighed on energy stocks overall. Occidental Petroleum is down about 25% from its recent high, which is roughly in line with the Energy Select SPDR ETF  (XLE) – Get Energy Select Sector SPDR Fund Report

However, there are some hopes that Occidental’s charts could improve going forward and with Buffett being a significant buyer on the dip. Let’s look.

Trading Occidental Petroleum Stock

Daily chart of Occidental Petroleum stock.

Chart courtesy of TrendSpider.com

Despite having performed incredibly well this year, it’s been a tough run for Occidental Petroleum stock over the past few weeks.

Shares are still up 91% on the year, but the stock has retreated in nine of the past eleven trading sessions. Amid that decline, it has broken below the 10-day, 21-day and 50-day moving averages. The stock closed Thursday at $56.09, up 0.57% on the day.

However, it’s trying to find its footing near an interesting area.

In the $54 to $55 zone, Occidental Petroleum stock has its rising VWAP measure dating back to the start of the year, as well as the 38.2% retracement of the one-year range.

If this area holds as support — just as it has done for the last week — then bulls will want to see it reclaim active resistance by clearing the 10-day moving average and pushing back over $60.

If it can clear $60, Occidental stock can retest its 50-day and 21-day moving averages — and likely in that order.

Should the stock fail to hold the $54 to $55 area as support, then that puts the second-quarter low in play near $51.50. Below that could open the door back down to the “Buffett Breakout” area near $43 and the 200-day the moving average.

And if that happens, you better believe Buffett will be buying the dip as well.