Trade of the Day: Valero Energy Corporation (VLO) Stock Ready for Another Push

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Valero Energy Corporation (NYSE:VLO) — VLO is the world’s largest independent refiner and marketer of petroleum products. Standard & Poor’s views Valero as a chief beneficiary from rising oil production from shale and from Canadian oil sands since most of this oil travels through the mid-states to the Gulf Coast, where Valero is the largest refiner.

Increasing supplies enable this company to boost exports at its volition, directing it to South America and/or Europe, whichever is most profitable.

S&P still has a four-star “buy” on VLO and has increased its rating on the oil and gas refining sub-industry to positive from neutral due to the election of Donald Trump and his prior comments on a positive energy policy. It is anticipated that the new approach to refining will provide a more favorable regulatory climate.

The prior presidential veto of the Keystone Pipeline XL may again land on President Trump’s desk for approval, and it is likely that he would approve it. Since Valero recently spun off its retail gasoline business, it is not yet possible for S&P to estimate the impact on earnings, but it will probably be another positive.

I have reviewed Valero Energy several times this year, the last on Oct. 19, recommending that traders buy the stock at $55 with a target of $65. VLO traded at under $55 the next day and met its target on Nov. 22 at over $66. But $66 was the top for that recovery move, and it is now retreating toward support at the 50-day moving average at $58 where traders will find support at its 50- and 200-day moving averages.

A Golden Cross long-term buy signal occurred in mid-November, increasing the likelihood of another bullish reversal. Thus buy VLO at $58 with a trading target of $66 for a proposed return of 14%-plus.

VLO shares currently pay a dividend of $2.40, for a dividend yield of 3.9%.

VLO Buy $58 Tgt $66
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Trade of the Day: Valero Energy Corporation (VLO) Ready for Another Push


Article printed from InvestorPlace Media, https://investorplace.com/2016/12/trade-day-valero-energy-corporation-vlo-stock/.

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