Tesoro Corporation (NYSE: TSO)

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Tesoro Corporation, together with its subsidiaries, engages in refining and marketing petroleum products in the United States. It operates in two segments, Refining and Retail. The Refining segment refines crude oil and other feed stocks into transportation fuels, such as gasoline, gasoline blendstocks, jet fuel, and diesel fuel, as well as other products, including heavy fuel oils, liquefied petroleum gas, petroleum coke, and asphalt. This segment also sells refined products in the wholesale market primarily through independent unbranded distributors; and in the bulk market primarily to independent unbranded distributors, other refining and marketing companies, utilities, railroads, airlines and marine, and industrial end-users. It owns and operates 7 refineries with a combined crude oil capacity of approximately 675 thousand barrels per day. The Retail segment sells gasoline, diesel fuel, and convenience store items through company-operated retail stations, and third-party branded dealers and distributors in the western United States.

To review Tesoro’s stock, please take a look at the 1-year chart of TSO (Tesoro Corporation) below with my added notations:

1-year chart of TSO (Tesoro Corporation)

TSO has made rallied higher since bottoming back in May. For the last (4) months though, TSO formed a 52-week high resistance level at $45 (navy). Earlier this week the stock broke through that resistance on route to a new 52-week high. A pull back could provide a nice long entry on the stock.

The Tale of the Tape: TSO broke out to a new 52-week high earlier this week. A long trade could be made at $45 with a stop placed below that level. A break below $45 would negate the forecast for a move higher.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT