The oil refiners and stations have been on fire lately. With oil prices steadily moving off lows, the service companies and support companies have been able to see their profits creep back up. This means that investors have been eager to move money back into this sector.
Since the end of the summer many names have come up as standout stocks in the space. Though some are still negative on the year, they have been making a beeline to highs and Chevron
The first thing that stands out from a technical perspective is the move it made off it's lows. If you look back to July you can see a complete change in personality. Notice how the first part of the year saw many sharp downdrafts followed by weak attempts at a rally. Now look from July to now and you can see how the upswings have become much more aggressive than the downdrafts. Because of this many bulls have found technical reasons to buy the stock.
So, as a reader of this you wonder, is it too late to get in? In fact, there still may be plenty of room left on this name. On the 21st of December the stock blasted off 3.25%, but it was how it did it that was so important to technical traders.
Look back over a year. Do you see how the move from late last year until now looks like a lowercase "u"? Technical traders refer to this as a cup. The move from october until now looks like a little handle on the right side of the "cup".
This pattern is a very popular one and there is no doubt that it will continue to attract the longer term investor. Targets for these traders will first be around $130 and then beyond. Happy trading!
