Here’s SUN for Jerry, who wrote:
Wanted to know your thoughts on SUN. It has been up a number of days in a row and I think it is due for a pullback. I also heard news that other countries would pickup the slack on the BP pipeline. Is that an evening doji star setting up on the chart?
The question was written after the close yesterday when It looked like an evening star ws forming. It didn’t play out that way but the stock has printed its second bearish candlestick in a row. I agreed that the stock is due for a pullback. Ideally it would fall no further than its 200-day moving average and then bounce. Like I said about Apple last week, I’d like to see stochastic at or near oversold before trying to buy the stock. Actually, this chart remnds me a lot of Apple’s chart right now. Both stocks could have just done head fakes above their january trendlines and 200-day moving averages. It’s worth paying close attention to how SUN acts if and when it retests the 200-day moving average.
I will add to the intrigue by noting that SUN is printing these two bearish candles at the same time it is approaching its earnings gap from May. The overall pattern almost looks like some kind of W-bottom in the making but I don’t trusss it given the steep move upward. If I remember correctly, SUN’s news back in May was not too good. I wonder what’s so good now. Then again, the market can just be manic in its flip flop decisions between love and hate.
Not that it matters…
Citigroup analyst, Doug Leggate, says, “We our steering investors towards Sunoco as our top refining pick for the balance of second half of 2006…”(http://www.streetinsider.com/Basic+Content/Citigroup+Downgrades+Tesoro+(TSO)+to+Hold/1088225.html)
I also read online that their premium gasoline margins are top notch. (Forbes http://www.forbes.com/markets/2006/06/13/sunoco-0613markets12.html)