Valero Energy Corp (VLO) shares have seen their Schaff Trend Cycle gradually uptrend this week over the past 3 sessions. While this indicates nice price momentum, it also suggests that if the reading moves into overbought territory (STC of 70), then the liklihood of a reversal greatly increases. Investors will be watching very closely over the next few days to see if the trend contiunes or reverses.
The Schaff Trend Cycle (STC) indicator combines the common indicators of MACD & Stochastic. The benefit of the Schaff Trend Cycle is that it is meant to be quicker than the standard macd and stochastic signals. The indicator uses similar methods to a MACD i.e uses exponetial moving averages but applies a cycle factor to them. Then the ‘price’ is smoothed using a mofidied Wilders’ smoothing algorithm. The Schaff Trend Cycle indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought. The STC indicator fluctuates between 0 and 100. Readings below 20 are considered oversold while readings above 80 are considered overbought.
Turning to some additional metrics for Valero Energy Corp (VLO), we note that the shares currently have a 50-day Moving Average of 67.63, the 200-day Moving Average is 66.39, and the 7-day is noted at 69.09. Following moving averages with different time frames may help offer a wide variety of stock information. A longer average like the 200-day may serve as a smoothing tool when striving to evaluate longer term trends. On the flip side, a shorter MA like the 50-day may help with identifying shorter term trading signals. Moving averages may also function well as a tool for determining support and resistance levels.
As we sail into the second half of the calendar year, investors may be looking to see what has gone right and what has gone wrong so far this year. Making necessary changes to some holdings may help position investors for the next couple of quarters. Being able to cut the riskier losers and take some profits from winners may help solidify the stock portfolio. As we run through the next round of company earnings reports, investors will be keeping a close eye on the data that is reported. Investors may be looking to buy companies that continue to post beats on the earnings front, and cut ties with ones that are not hitting their marks.
Traders may be relying in part on technical stock analysis. Valero Energy Corp (VLO) currently has a 14-day Commodity Channel Index (CCI) of 157.95. Despite the name, CCI can be used on other investment tools such as stocks. The CCI was designed to typically stay within the reading of -100 to +100. Traders may use the indicator to determine stock trends or to identify overbought/oversold conditions. A CCI reading above +100 would imply that the stock is overbought and possibly ready for a correction. On the other hand, a reading of -100 would imply that the stock is oversold and possibly set for a rally.
At the time of writing, the 14-day ADX for Valero Energy Corp (VLO) is 19.21. Many technical chart analysts believe that an ADX value over 25 would suggest a strong trend. A reading under 20 would indicate no trend, and a reading from 20-25 would suggest that there is no clear trend signal. The ADX is typically plotted along with two other directional movement indicator lines, the Plus Directional Indicator (+DI) and Minus Directional Indicator (-DI). Some analysts believe that the ADX is one of the best trend strength indicators available.
The Relative Strength Index (RSI) is one of multiple popular technical indicators created by J. Welles Wilder. Wilder introduced RSI in his book “New Concepts in Technical Trading Systems” which was published in 1978. RSI measures the magnitude and velocity of directional price movements. The data is represented graphically by fluctuating between a value of 0 and 100. The indicator is computed by using the average losses and gains of a stock over a certain time period. RSI can be used to help spot overbought or oversold conditions. An RSI reading over 70 would be considered overbought, and a reading under 30 would indicate oversold conditions. A level of 50 would indicate neutral market momentum. The 14-day RSI is currently sitting at 64.70, the 7-day is at 73.03, and the 3-day is spotted at 86.39.