Slippery markets are certainly making it tough for Traders getting caught in the schizophrenic back-n-forth we’ve seen in indexes since the S&P 500 first found it’s 200-day moving average on March 23rd.
However, for those who can tune out the noise and zoom out to a longer-term focus, we think HOLLY has uncovered a pretty compelling opportunity in the oil patch. Check out HollyFrontier $HFC, an independent petroleum refiner in the United States with operations throughout the mid-continent, southwestern and Rocky Mountain regions.
The stock has been on a tremendous tear, up nearly 100% in the past 12 months, but more importantly it is closing in on breaking through resistance that dates back to 2013 when it last saw all-time highs. With this kind of momentum happening against this current market backdrop, $HFC offers a chance to hitch a ride on the back of one of the next market leaders.
SWING TRADERS: @tradeideas HOLLY has identified a MAJOR 5-year breakout possibly setting up in $HFC. We’re getting into the oil business and adding HollyFrontier to the HOLLY Hot List at tomorrow’s open. https://t.co/Nnr5hSoELB pic.twitter.com/3F1KHVB5Bb
— Sean McLaughlin 📈 (@chicagosean) April 9, 2018
As such, we’ll be adding $HFC to the HOLLY Hot List at tomorrow’s opening print (Tuesday April 10, 2018) and we’ll keep long the stock until we experience a 20% drawdown from our highs.
HOLLY Hot List portfolio update:
Recent market volatility cost us positions in two names since our last update. We lost $SGH on April 4th, but at least we got to hold on to some profits. If you held to the bitter stop loss, you still kept +13% gains. If you were more dexterous, you had an opportunity to participate in as much as +41% upside from our entry price.
We also lost $ZGNX on April 6th, and this one was a classic: We nearly quite literally bought the top, and the stock went practically straight down since our entry day. This one hurts. If you held with us the whole way, you swallowed a full 20% loss. A rare occurrence indeed.
Portfolio numbers aren’t all that sexy, but considering the market environment we’ve been in, -5% in a portfolio of long, highly volatile momentum stocks is pretty solid when the S&P 500 is down -2% YTD. And in most cases, there were plenty of opportunities to trade around these positions and minimize losses and capture additional gains.
Stay the course.