HollyFrontier Corp. (HFC) emerged from a nice looking base formation in the latter half of 2017 and surged from $30 to over $80. Since the zenith in early June prices have been correcting to the downside. Jim Cramer favored the company last night during the Lightning Round, but let's run through the charts and indicators to see if this might be a good time and level to buy.
In this daily bar chart of HFC, below, we can see how prices have been slowly drifting lower from the early June high. HFC is now at an interesting juncture. Prices are below the declining 50-day moving average line and just a tiny fraction above the rising 200-day line. There doesn't look like there is much chart support until we get down around the $55-$50 area so this is a good time to consider some action. The daily On-Balance-Volume (OBV) line shows a decline in June and a spike up in volume. Since the middle of June the OBV line has trended sideways to slightly higher telling us that prices have fallen of their own weight. In the lower panel is the 12-day price momentum study which shows that momentum slowed from September to October and this is a bullish divergence when compared to the lower lows in price. This is a fairly short bullish divergence and it may or may not produce or generate a bounce.
In this weekly bar chart of HFC, below, we can see that prices are still above the rising 40-week moving average line. The weekly OBV line shows a decline from May and the MACD oscillator crossed to a take profits sell signal in early July.
In this Point and Figure chart of HFC, below, we ignore volume and time and small "jiggles" in the price. This chart shows that prices have broken on the downside and $57 is a possible price target.
Bottom line strategy: you might consider putting HFC on your shopping list but right now I would want to see better signs that prices are done correcting.