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What Does Valero’s Moving Average Suggest?

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Valero’s moving averages in the past four quarters

In 1Q17, VLO’s 50-day moving average stood above its 200-day moving average. This occurred despite the fall in stock prices led by dismal 4Q16 earnings and a surge in gasoline and distillate inventories in the industry.

In 2Q17, Valero announced better-than-expected 1Q17 earnings, keeping its 50-day moving average above its 200-day moving average. In 3Q17, Valero’s refining margin indicators rose quarter-over-quarter and year-over-year, mainly due to the impact of Hurricane Harvey. Plus, the stock trended higher in 4Q17, possibly due to US tax reforms. VLO’s 50-day moving average surged.

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Valero’s moving averages in 1Q18

In 1Q18, VLO’s 50-day moving average remained above its 200-day moving average. Valero’s 4Q17 earnings exceeded estimates, and company posted a strong set of numbers.

Currently, VLO’s 50-day moving average stands 20.0% above its 200-day moving average. This represents a wide gap between VLO’s 50-day and 200-day moving averages. 

So, the apprehension that Valero’s stock price fall could cause its 50-day moving average to break below its 200-day moving average is minimal. This implies that Valero still stands in technically bullish terrain.

Peers’ moving averages

Among Valero’s peers, HollyFrontier (HFC) and PBF Energy’s (PBF) 50-day moving averages stand 33.0% and 22.0%, respectively, above their 200-day moving averages. Phillips 66’s (PSX) 50-day moving average stands 11.0% above its 200-day moving average. Delek US Holdings (DK) 50-day moving average stands 22.0% above its 200-day moving average.

The SPDR Dow Jones Industrial Average ETF’s (DIA) 50-day moving average is 10.0% above its 200-day moving average.

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

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