"Stocks Of The Day: Are Double Bottom Patterns Bullish For Valero, Marathon?"

Ladies and gentlemen, buckle up! Today, we're diving into the world of energy stocks and examining two giants: Valero Energy (VLO) and Marathon Petroleum (MPC). The question on everyone's mind: Are the double bottom patterns forming in these stocks a bullish signal, or just a mirage in the desert of market volatility? Let's find out!

First, let's talk about Valero Energy (VLO). This stock has been on a rollercoaster ride, with a total return of -0.34% over the past 12 months. That's a far cry from the S&P 500's 25.80% return. But here's the thing: VLO has shown some resilience, with a 2.12% YTD return. Now, if you look at the chart, you might see a double bottom pattern forming. This pattern, shaped like a "W," suggests that the stock has found support and is ready to rebound. But don't get too excited just yet!



Let's break it down. The first low was met with significant buying interest, producing a long, light candlestick and a bullish engulfing line. The subsequent high was nearly 10% up from the first low, suggesting investors should keep a sharp eye out for another downside move at this point, as rebounds from the first low are typically on the order of 10% to 20%. The second low of the pattern is within 3% to 4% of the prior low, contributing to the validity of the pattern. With the second bottom now in place, traders should reckon with a potential correction higher, or even a new uptrend, as a level of significant support has been reached and tested twice. The pattern is invalidated and downside potential resumes on a drop below the double bottom lows. On the other hand, a daily close above the intermediate high suggests a major reversal and per

But here's the kicker: VLO's financials are a mess. Revenue CAGR TTM is -10.93%, net income CAGR TTM is -65.53%, and EPS CAGR TTM is -84.68%. That's a triple whammy of bad news! So, while the double bottom pattern might be tempting, you need to be cautious. This is not a no-brainer buy!

Now, let's turn our attention to Marathon Petroleum (MPC). This stock has had a better run, with a 2.03% YTD return. But don't let that fool you. MPC's revenue for 2024 was $139.34 billion, a decrease of -6.70% compared to the previous year. Earnings were $3.44 billion, a decrease of -64.41%. Ouch! But, just like VLO, MPC might be forming a double bottom pattern. The first low was met by significant buying interest after a sudden, sharp decline, producing a long, light candlestick and a bullish engulfing line. The subsequent high is nearly 10% up from the first low, suggesting investors should keep a sharp eye out for another downside move at this point, as rebounds from the first low are typically on the order of 10% to 20%. The second low of the pattern is within 3% to 4% of the prior low, contributing to the validity of the pattern. With the second bottom now in place, traders should reckon with a potential correction higher, or even a new uptrend, as a level of significant support has been reached and tested twice. The pattern is invalidated and downside potential resumes on a drop below the double bottom lows. On the other hand, a daily close above the intermediate high suggests a major reversal and per

But here's the thing: MPC's financials are not much better than VLO's. So, while the double bottom pattern might be enticing, you need to be careful. This is not a slam-dunk buy!

In conclusion, while double bottom patterns can be a bullish signal, you need to look at the bigger picture. VLO and MPC's financials are not inspiring confidence. So, do your homework, stay vigilant, and remember: the market is a fickle beast. Don't get caught in the trap of chasing patterns without considering the fundamentals. Stay tuned for more stock picks and market insights!