Refiners

The crack spread is taking a hit from its recent highs. This is not good for a the refiners. Again this isn't the actual crack spread, but i use it to show the direction of the spread.

Theses refiners just can't catch a break! Oil goes up, gasoline prices don't keep up; oil comes down, gasoline prices fall even faster.

The refiners look like they are on the brink for further downside.

FTO

Lower low next?

SUN

Looks very bad.

TSO

It is still within its range, but judging by other refiners, it should break down soon. If I was still bullish in this sector, this would be a very nice entry.

WNR

This one still looks somewhat bullish, pulling back to previous support and 50 DMA. But the upward momentum certainly is not there.

Oil is very confusing here. Reports show an increase in gasoline supply and decrease in demand. This is driving gasoline prices down big time, yet oil manages to trade with the market and participates in rallies.

Refiners

My little chart to show the direction of the crack spread. Seems to be pulling back a bit, but it is hanging in there.

I expect oil to pullback some more and hopefully improve the crack spread.

The charts of the refiners look very promising, however you always have to consider the possibility that these stocks have not bottomed. But given that crude has topped, the outlook of the refiners should not deteriorate further unless gasoline demand drops down huge.

FTO

Breaking to the upside again, I wouldn't chase it here. But it is now above the 10, 20 and 50 DMA which are all increasing. Very bullish.

TSO

Breaking to the upside and showing a lot of strength. A little overextended here since it has gone from 15 to 20 in 8 days. It is above the 10, 20 and 50 DMA which are all increasing. It is also right at the 100 DMA, which may provide resistance. A pullback or a breakout followed by a pullback should be bought. Very bullish.

WNR

It is now above the 10, 20, 50, 100 DMA and they are all increasing. This gives me a lot of confidence that this has bottomed. Bullish but only intraday since I expect pullbacks.

SUN

Stabilizing, the least extended of the refiners that I follow.

HOC

Another example of strength, not my favorit, but it can make moves.

Update: LULU, WNR, FSYS

FSYS currently -10%
LULU +4%
WNR rallying from the open.

I currently have 0 holdings, but LULU looks interesting around 21 (I will wait for further consolidation).

UPDATE: bought a few shares of LULU @ 21.4, couldn't resist. Stop loss (maybe) at break even.

UPDATE 2:
Stocks ended: LULU +7.7%, WNR +5%, FSYS -5.5%

WNR had a 14% turnaround from open to close.

Update

Crack spreads fell today. I thought they would surely rise today. Seeing crude below 100, and hearing about $5 gas, I thought it might even go higher today!


Falling significantly from the highs, but still looks good. Overall, I expect oil stocks to firm up this week.

WNR, pulling back, gave back most of its gaves form friday.

It is right at the 10 DMA. Further pullback followed by strength would make this a buy.

FTO, jumps right back into its former range.

I think this should be day traded to both side with the huge moves it has. It looks bearish here.

TSO, closes below 16, very bad.


VLO

With exposure to hurricane Ike, this look very bearish.

Pair trade? Long TSO short VLO.

LULU

Pulls back to the 20 level. Buy once strength is shown on the intraday level. Could be challenging in this market.

ICE and NYX looking very bearish.

Refiners, look at that crack!

Crack spreads moving up big today.


WNR bounced right off of support +6%.
FTO breaking out +13%
TSO firming up +9%

Buy any dips. But most importantly, manage risk. These are still very risky plays.

Refiners, crack spread

I can't seem to find a good source for the crack spread. So I decided to plot my own.

First a look at USO, a proxy for oil.

Notice that oil is back at the March levels, with a peak in July.

Now a look at UGA, a proxy for gasoline.

We are again, back to the March levels, with a peak in July.

Here is the chart of the UGA (proxy for gasoline) - USO (proxy for oil), which should be a good approximate for the difference in gasoline and crude oil (aka the crack spread).

You can see the pain the refiners were taking as oil peaked in July. However, we are now back to March levels with momentum to the upside. Can the refiners recover from the big hit they took during the last few months?

Now a look at the refiners, which have still been struggling.

WNR is right at a recent high, which could act support. It is also right above the 20 and 50 DMA. This can provide a great buying opportunity if refiners come into favor.

Days To Cover (Short Interest Ratio) 7.8 Very Nice.

TSO is much weaker. It is testing a recent lower low. If you buy here, at least the stop will be easy to set.

Days To Cover (Short Interest Ratio) 4.7 Nice.

FTO is still consolidating and trying to form some support. This is very healthy.

Days To Cover (Short Interest Ratio) 4.1 Nice.