And not just the Ozzie Rahpoe-tah (sic)! Take a look at Jake’s favorite refinary play, and one of my “top ten” holdings:
Note how it’s just today breaking out of that medium term triangle? It’s also continuing yesterday’s move above the intermediate-term 61.8% fibonacci retrace line (drawn from the 8/25/08 high to the 11/21/08 low) at $14.86, and has also show good support at the short term 38.2% fib (again, “strong”) retrace line (drawn on this chart from the 11/21/05 low to the 02/16/09 recent high).
I’d be more comfortable if the volume were a bit better than it is this morning, but there is some precedent on “low volume sneak ups” for this stock if you look back at December’s move on the above chart.
That December move-up also nicely illustrates how a stock can move quickly up once it breaks out of a congestion zone. As you can see, TSO will be leaving it’s current congestion zone at about $16.30 or so, which will coincide quite neatly with the 200-day EMA currently at $16.49.
The more cautious will want to wait until we break above that congestion, and the 200-day is my first “check off” where I will be selling covered calls at least. However, given the moderation in crack spreads and the supply-demand issues in the gasoline distribution channels entering the summer driving months, I think I am reasonable in targetting the recent highs of $19.00 as a result of any “congestion relief.” That could come very quickly, so keep an eye open. As well, I am targetting the 38.2% long term fib retrace (drawn from the 10/26/07 highs to recent November ’08 lows) level of $28.65 as my “major exit point” for this pick.
Disclosure: I am very long this stock, and warn you that any purchase of it may signal your local Congressman that you are “a-okay” with a new refinery project in your postage stamp backyard. Oh, and you may lose money.
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