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What’s in Store for Valero Energy?

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Part 13
What’s in Store for Valero Energy? PART 13 OF 17

How Valero’s Moving Averages Have Trended in 1H17

Valero’s moving averages in 1H17

In 1Q17, Valero stock declined, which was likely due to its dismal 4Q16 earnings. Plus, gasoline and distillate inventories rose in the industry, which further pressured the stock. 

Despite the fall in its stock price, VLO’s 50-day moving average stood above its 200-day moving average. Valero’s 50-day moving average had crossed over its 200-day moving average in 2H16. In 2Q17, Valero announced its 1Q17 earnings. The company beat its earnings estimates for the first quarter.

How Valero’s Moving Averages Have Trended in 1H17

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Valero’s moving averages in 3Q17

In 3Q17, VLO’s 50-day moving average remained above its 200-day moving average. Valero’s 2Q17 earnings, released in 3Q17, also surpassed estimates. Valero’s refining margin indicators rose in 3Q17 quarter-over-quarter and year-over-year. Please refer to Part 4 of this series for our discussion of VLO’s regional refining indicators.

Currently, VLO’s 50-day moving average stands 2% above its 200-day moving average. If RINs (Renewable Identification Numbers) prices rise, gasoline or distillate levels in the industry increase, or refining margin indicators fall, these events could pressure Valero stock. If a downtrend in Valero stock ensues, it could lead to its 50-day moving average breaking below its 200-day moving average—a bearish technical sign—which could cause an acceleration in the stocks fall.

Peers’ moving averages

Among Valero’s peers, HollyFrontier (HFC) and Delek US Holdings (DK) saw their 50-day moving averages stand 2.3% and 2.0% above their 200-day moving averages, respectively. Andeavor’s (ANDV) 50-day moving average stands 10.7% above its 200-day moving average. However, PBF Energy’s (PBF) 50-day moving average stands 1.9% below its 200-day moving average.

The SPDR Dow Jones Industrial Average ETF (DIA), which represents the overall economy comprising diverse industries, has a 50-day moving average that is* 4.6% above its 200-day moving average.

Move on to the next part to look at Valero’s next quarter price range forecast based on its implied volatility.

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