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Tesoro Stock on the Move in 2Q17: What's Driving It?

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Part 2
Tesoro Stock on the Move in 2Q17: What's Driving It? PART 2 OF 11

What Tesoro’s Moving Averages Indicate in 2Q17

Tesoro’s moving averages

In 2016, Tesoro (TSO) stock witnessed a whipsaw performance due to an uncertain refining crack environment. In the later part of the year, Tesoro stock rose as the company agreed to acquire Western Refining. TSO’s 50-day moving average crossed over its 200-day moving average in 4Q16.

In 1Q17, TSO stock fell due to its 4Q16 earnings, which missed estimates, as well as high gasoline and distillate inventories in the industry. However, TSO’s 50-day moving average stayed above its 200-day moving average in the first quarter.

What Tesoro’s Moving Averages Indicate in 2Q17

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Tesoro’s moving averages in 2Q17 so far

Tesoro’s downtrend extended in the early days of the second quarter in anticipation of the company’s earnings. Tesoro’s 50-day moving average broke marginally below its 200-day moving average.

As Tesoro announced its 1Q17 numbers, which surpassed its estimates, the stock rose. Tesoro’s 50-day moving average crossed above its 200-day moving average—a bullish technical sign. Tesoro’s refining index values increased, boosting the stock. Overall, Tesoro stock has risen 13% since April 3.

Currently, Tesoro’s 50-day moving average trades above its 200-day moving average.

Peers’ moving averages

Like TSO, Marathon Petroleum’s (MPC) and Valero Energy’s (VLO) 50-day moving averages trade above their 200-day moving averages. Since VLO’s 50-day moving average is sliding down, it could break below its 200-day moving average—a bearish technical sign. Currently, VLO’s 50-day moving average is just 1.7% above its 200-day moving average. MPC’s 50-day moving average is 7% above its 200-day moving average.

As the broader market indicator, the SPDR Dow Jones Industrial Average ETF’s (DIA) 50-day moving average trades ~6% above its 200-day moving average.

Phillips 66’s (PSX) 50-day moving average trades 3% below its 200-day moving average. PSX’s 50-day moving average continues to slide downward, widening the gap between itself and the 200-day moving average.

In the next article, we’ll look at Tesoro’s nine-day stock price forecast range for the period ending June 30, 2017, based on its implied volatility.

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