VLO breaks below Thursday's low
Valero Energy Corporation (VLO) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VLO finished the week -1.67% lower at 82.64 after losing $1.06 (-1.27%) today, notably underperforming the S&P 500 (0.18%) ahead of tomorrow's Presidents' Day market holiday. Closing below Thursday's low at 83.62, the stock confirmed its breakout through the previous session low after trading up to $1.76 below it intraday.
Daily Candlestick Chart (VLO as at Feb 14, 2020):
Friday's trading range has been $2.35 (2.79%), that's slightly above the last trading month's daily average range of $2.31. Things look different on the weekly timeframe, where the market's trading range of the last week has been below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for VLO.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 81.86 earlier during the day, Valero Energy bounced off the key technical support level at 82.23 (S1). The failure to close below the support could increase that levels importance as support going forward. When prices bounced off a significant support level the last time on Wednesday, VLO actually lost -1.58% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
With prices trading close to this year's low at 79.74, downside momentum might speed up should the market break out to new lows for the year.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Valero Energy. Out of 313 times, VLO closed higher 56.87% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.79% with an average market move of 0.98%.