HollyFrontier Corp. (HFC) is close to making an historic upside breakout. I am not sure that I have used the word "historic" before in this column, but when I looked at a chart of HFC going back to 2011 it is the first word that came to mind. Sounds pretty bold but let's look at the charts so you can see what I mean.
In this daily bar chart of HFC, below, we can see a strong rally from early June. Prices have more than doubled since the middle of 2017 and they are still heading higher. HFC is above the rising 50-day moving average line and the rising 200-day line. At the beginning of September the 50-day line crossed above the 200-day line for a bullish golden cross.
The daily On-Balance-Volume (OBV) line has been moving higher since June, telling us that buyers of HFC have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator has spent much of the last year above the zero line or in bullish territory and we can see a fresh buy signal last month.
In this weekly bar chart of HFC, below, we can see the price action going back to 2011. In 2013 HFC spiked above $55 and retreated. In the latter half of 2015 HFC spiked towards $55 and retreated. Now in 2018 HFC is again challenging the $55 level or speed limit. Prices are above the rising 40-week moving average line.
The weekly OBV moved higher in these three examples when $55 was tested but the current rise has been more enduring and stronger. Third time is the charm?
The trend-following Moving Average Convergence Divergence (MACD) oscillator is poised for a fresh go long signal on this longer time frame.
In this Point and Figure chart of HFC, below, we can see the uptrend from 2017. A price target of $68.40 is being projected.
Bottom line: With the strongest looking OBV line we have seen for HFC in years, the chances that HFC breaks out over $55 have gone up. Traders can go long HFC at current levels and on strength risking below $48 while looking for gains in the $68-$70 area.