- Posted by Greg Harmon
- on October 15th, 2012
Small independent oil refiners’ stocks had great runs higher throughout the summer. Straight up in many cases. No chance to get in. Then they all started to rollover. Now there are signs that these two are ready to reverse back higher. Take a look.
Phillips 66, $PSX
Phillips 66, $PSX consolidated for a month at in the 45-47 range before pulling back. Last Friday though it printed a potential bullish reversal candle, a Hammer, which it confirmed higher Monday. But in addition to that the Relative Strength Index has turned back higher and the Moving Average Convergence Divergence indicator (MACD) has leveled. It also halted at the 50 day Simple Moving Average (SMA). It could certainly continue lower, but with all these signs lined up it is worth considering a long trade entry against a stop near 43.
Valero Energy, $VLO
Valero Energy, $VLO, is a little bit dicier, but also worth a look. The two Hammers back to back with long tails as the volume is decreasing after the climax selling on Wednesday last week, along with a RSI that is nearing oversold territory suggest that dipping your toe into a long trade against a stop at 28 is worth considering.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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