Chart Advisor: Buffett’s Berkshire Buys More OXY

Articles From: Investopedia
Website: Investopedia

By J.C. Parets & All Star Charts

Wednesday, 8th March, 2023

1/ Buffett’s Berkshire Buys More OXY

2/ Tech Shows Leadership

3/ The Short End Rips Higher

4/ Monitoring CAD Weakness

Investopedia is partnering with All Star Charts on this newsletter, which both sells its research to investors, and may trade or hold positions in securities mentioned herein. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice.

1/ Buffett Buys More OXY

Warren Buffett‘s Berkshire Hathaway is making headlines again, putting a floor in Occidental Petroleum’s (OXY) stock price at the exact level we’ve seen Berkshire step in many times before.

Below is a daily chart of OXY showing when and where Berkshire Hathaway has increased its holdings of the energy company. It reported its initial position in a Form 4 statement in early March of last year.

Source: All Star Charts, with data provided by Optuma

Fast forward to today, and Berkshire has built a massive interest of roughly 284 million shares, which includes 84 million shares from warrants. This is equivalent to a 30% ownership stake, making Berkshire by far the largest shareholder in the company.

In its first Form 4 filing since September, Berkshire just reported an additional 5.8 million shares of OXY at an average price of $61.10 per share. The transactions were spread out over the last three trading days.

2/ Tech Shows Leadership

The technology sector (XLK) has been among the best-performing sectors on a year-to-date basis.

When we evaluate the relative trend, tech refused to complete a massive topping formation versus the S&P 500 (SPY) when it bounced off the lower bounds of this multi-year trading range in January. Just two months later, it’s making new highs:

Source: All Star Charts, with data provided by Optuma

Fueled by the rally earlier this year, tech stocks have reached their highest level in almost six months relative to the broader market. Despite the recent correction in the stock market, tech stocks continue to show relative strength, falling less than the S&P 500.

We’re watching to see if the XLK/SPY ratio can reclaim its August highs. If it does, XLK could continue to outperform the broad market over longer timeframes.

3/ The Short End Rips Higher

The rising interest rate environment remains intact both in the U.S. and abroad. The short end of the yield curve has had the most upward momentum.

The one-, two-, and three-year Treasury yields are printing fresh multi-year highs, hitting their highest levels since the summer of 2007.

Source: All Star Charts, with data provided by Koyfin

With the short end of the yield curve breaking to new highs together with European sovereign benchmark rates, it could only be a matter of time until longer-duration yields in the U.S. follow.

Under this scenario, the 10-year Treasury yield could rise to 4.50%, with the 30-year yield not far behind.

4/ Monitoring CAD Weakness

The U.S. dollar surged yesterday as global currencies slid to fresh lows. But one chart in particular has our attention: the Canadian dollar (CAD).

CAD dropped more than 1% as it heads back toward its 2022 lows:

Source: All Star Charts, with data provided by Optuma

The decline in the commodity-centric Canadian dollar could have implications for crude oil prices, as “black gold” is one of Canada’s main exports.

A weaker Canadian dollar could foreshadow selling pressure for crude oil.

Originally posted 8th March, 2023

Disclosure: Investopedia The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy.  While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.

Disclosure: Interactive Brokers

Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: ETFs

Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at