Valero Energy Corp. (VLO) has doubled in price in less than two years. Who says you cannot make money in energy? VLO is breaking out to a new high Wednesday so we have an opportunity to look at the charts at just the right time. Valero was recently mentioned by Jim Cramer in his 15 Sectors to Buy on a U.S./Chinese Trade War article on Real Money.
In this daily bar chart of VLO, below, we can see that prices emerged from a consolidation pattern in September and rallied nearly uninterrupted until late January. Prices then traded sideways or consolidated those gains until recently when they moved up to break the January peak. VLO is above the rising 50-day moving average line and the rising 200-day line. The On-Balance-Volume (OBV) line shows its own uptrend and tells us that buyers of VLO have been aggressive even when prices have corrected. The trend-following Moving Average Convergence Divergence (MACD) oscillator just moved up from the zero line for a fresh outright go long signal.
In this weekly bar chart of VLO, below, we can see that prices are above the rising 40-week moving average line. The weekly OBV line is strong and so is the MACD oscillator which is narrowing toward a bullish crossover.
In this Point and Figure chart of VLO, below, we can see a fresh breakout at $100 and an upside price target of $120.
Bottom line: Risking below $95, traders could go long VLO on strength looking for gains to the $120 area.