Valero (VLO) is moving up on the back of the gasoline issues around the Houston flooding, but the chart was already at the top of the range before Monday. Monday it broke out to new highs and on Tuesday retreated off those highs once again. The chart has some very interesting technicals.
The Yield is very healthy at 4% so that keeps you interested. The SCTR is mid-range which is not my favorite. I want to see it become a top performer above 75. The RS broke out to new 5-month highs but is retreating slightly today which you can see in the zoom box on the right. Price is pinching between an upside breakout and the 200 Daily MA. We are going to see some price action soon, one way or the other. The reason is the momentum has a trend of rising lows and lower highs. The price pattern looks constructive to me, but usually will when the last data point is tucked in the top right corner. If it was at the bottom of the range, it might feel a little more bearish.
It looks good if it goes back above $68.25 on a closing basis. A weekly close above that level would be very supportive. At this point, this gasoline refiner is filling the tank. Let's see if it keeps driving ahead or backs up!
Greg Schnell, CMT,MFTA.