VLO closes above its opening price after recovering from early selling pressure
Valero Energy Corporation (VLO) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, VLO finished the week 11.74% higher at 65.68 after edging lower $0.05 (-0.08%) today on low volume, slightly underperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $1.60 lower after the open, the market managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (VLO as at May 22, 2020):
Friday's trading range has been $2.03 (3.1%), that's far below the last trading month's daily average range of $3.62. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for VLO.
Two candlestick patterns are matching today's price action, the Bullish Spinning Top which is known as bullish pattern and one bearish pattern, the Hanging Man. The last time a Bullish Spinning Top showed up on April 28th, VLO gained 14.53% on the following trading day.
Prices are trading close to the key technical resistance level at 66.94 (R1).
Valero Energy shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the close-by swing high at 68.25 where further buy stops could get activated. Trading close to March's high at 69.05 we might see further upside momentum if potential buy stops at the level get triggered.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "2 Consecutive Lower Closes" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Valero Energy. Out of 315 times, VLO closed higher 57.14% 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 59.68% with an average market move of 1.08%.