The Gap between VLO’s 50- and 200-Day Moving Averages Grows



Valero’s moving averages prior to Q2

Previously, we saw that Valero Energy (VLO) stock has surged 30% this quarter. In this part, we’ll look at VLO’s moving averages.

In the past year, VLO’s 50-DMA (day moving average) has been higher than its 200-DMA. In Q3 2017, Valero’s refining margin indicators rose YoY (year-over-year) and sequentially, mainly due to Hurricane Harvey. Valero stock and its 50-DMA trended higher in Q4 2017, mainly due to US tax reform. In the first quarter, VLO’s 50-DMA stayed above its 200-DMA, led by robust fourth-quarter numbers.

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Valero’s moving averages in the second quarter

On April 26, Valero published its first-quarter earnings, surpassing earnings estimates due to its refining earnings rising YoY. A better refining environment and stronger markets boosted Valero stock, expanding the gap between its 50-DMA and 200-DMA—a favorable sign. VLO’s 50-DMA, which was 15% above its 200-DMA at the start of this quarter, is now 19% above its 200-DMA.

Peers’ moving averages

HollyFrontier’s (HFC) and PBF Energy’s (PBF) 50-DMAs are 29% and 20% above their 200-DMAs, respectively, while Phillips 66’s (PSX) is 11% above its 200-DMA, and Delek US Holdings’ (DK) is 34% above its 200-DMA.

The SPDR Dow Jones Industrial Average ETF’s (DIA) 50-DMA is 2% above its 200-DMA. Continue to the next part, where we’ll forecast Valero’s price based on its implied volatility.


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