Valero Coming Down?

Published on Thursday, 26 January 2012 06:16 Written by Christopher Lynn

New York, January 26th (TradersHuddle.com) - Shares of Valero Energy Corporation (NYSE:VLO) closed the trading day at $24.65 well above its calculated resistance at $21.42, which was calculated from a peak and throughs algorithm, making traders worry about a possible pull back in the stock price.

Valero Energy Corporation (NYSE:VLO) is an independent petroleum refining and marketing company that owns and operates refineries in the United States, Canada, and Aruba. The Company produces conventional gasolines, distillates, jet fuel, asphalt, and a series of petrochemicals and lubricants.

Valero's stock broke out of its defined range that had support at $19.12 and resistance at $21.42. Now the stock is working on developing a new trading range, which should be defined by the high setup after this breakout and its probable support, which could be its previous resistance level $21.42.

From a technical perspective traders should wait to establish a position in Valero until a base in the stock develops that can provide good reference points to the upside and most importantly to the downside, for traders have a risk reference point before entering into a position on Valero stock.