Tesoro is a Gusher – Fade It

Tesoro Petroleum, $TSO, broke out over resistance August 2nd, and has not looked back. Three gaps later, it is sitting 36% above the 50 day Simple Moving Average (SMA) and 50% above the 100 day SMA. Additionally the Relative Strength Index (RSI) is over 80 and may be starting to fade. Combined with the Moving Average Convergence Divergence indicator (MACD) falling toward the

zero line this name gets high attention for a short trade. Yes the stock can correct through time and not fall but that does not mean you should not be watching it. If it does pullback support comes at 30 after all. Pull out to the weekly view and there is much of the same picture. RSI over 80, extended from both the 50 and 100 week SMA, and over the Bollinger bands. The one difference is the rising and bullish MACD. This could be enough to force the overbought correction through time, but did I mention the potential is back to 30? A move under 38 can be your short entry or more conservatively under the first gap at 36.57.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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