Valero Energy could soon resume its bullish trend

The company shows strong fundamentals. Firstly, the security is clearly undervalued compared to its peers, considering Thomson-Reuters analyst estimations, with an EV/Sales ratio estimated at 0.26 and P/E ratio of 8.97x 2014 estimates. Moreover, the analysts have recently revised upward their EPS estimates for 2014 and 2015. Finally, the stock is supported by a strong outperform consensus and show an interesting potential considering the average target price of analyst at USD 59.4 compared to current price.

Technical patterns are in the green: prices are up for several months. Lately, this movement has been stopped and the stock is now near a resistance level tested at several occasion. Once this USD 55.5 will be passed, the share price should resume its bullish trend. Orientation of all moving average on all time supports this opinion.

Considering fundamentals and technical configuration, active investors could take a long position after the stock has breakout its USD 55.5 resistance. The target will then be set at USD 59, calculated by swing effect. Once the position taken, a stop loss will be place under the entry point protecting from a failure of the overflow.