Western Refining, Inc. (NYSE: WNR)

Western Refining, Inc. operates as an independent crude oil refiner and marketer of refined products. The company’s Refining segment owns and operates two refineries, and related refined product distribution terminals and asphalt terminals, as well as operates a crude oil gathering pipeline system. This segment offers crude oil and other feedstocks into refined products, such as gasoline, diesel fuel, jet fuel, and asphalt to the wholesale distributors and retail chains. Its Wholesale segment distributes gasoline, diesel fuel, and lubricant products. The company’s Retail segment operates retail stores that sell gasoline, diesel fuel, and convenience store merchandise. As of December 31, 2013, it operated 228 retail locations in Arizona, Colorado, New Mexico, and Texas; a fleet of crude oil and refined product truck transports; and a wholesale petroleum products distributor that operates in Arizona, California, Colorado, Nevada, New Mexico, Texas, Maryland, and Virginia.

To review Western’s stock, please take a look at the 1-year chart of WNR (Western Refining, Inc.) below with my added notations:

1-year chart of WNR (Western Refining, Inc.)

WNR has been trading sideways for the last 8 months. Over that period of time the stock has formed a common resistance area at $42 (blue). In addition, the stock has also created a clear level of support at $36 (green). At some point the stock will have to break out of its current consolidation.

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The Tale of the Tape: WNR has levels of support at $36 and resistance at $42. The possible long positions on the stock would be either on a pullback to $36, or on a breakout above $42. The ideal short opportunity would be on a break below $36.

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

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