Here’s your trade on $DK – November 16, 2022


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I want to look at Delek US Holdings ( NYSE: DK ). A good sector, oil and gas, refining, and marketing. What could be better than that? I will tell you what; this is a really, really good pattern.

You can see the stock had been in this really nice uptrend and then it slammed down pretty quickly, this is a pretty steep pullback, 40 percent in a little over a month. But what we have seen is this type of a thing, this is a pretty favorable pattern here.

You get this kind of prolonged pinching, it is just like a volatility compression thing. A big move lower, and then after that, we get subsequent higher lows. I won’t really say higher highs all the time because that is really not the case here. But we can just say that generally speaking the pattern has been squeezing.

So that was the way this thing has been playing out. But then, just the other day, on the 7th, the stock broke out higher on much heavier than average volume and has held that since that time. It has held this level, above, we will say, above 33.00 anyway.

So my suggestion is this, if the stock breaks out above 35.00, check and make sure the volume is good. If it is heavier than average volume then this is probably a stock that is going to work and you want to be buying it.

On the other hand, if the stock were to pull back to, say, 33.00, that would actually be better. Because if you are able to buy the stock low like this, at 33.00ish, you can keep a really tight stop on it. Because you are buying so close to support that the stock doesn’t have to fall out of support that much before you say, Oops, I’m wrong, I’m going to get out of this stock.

So this is the way I would trade this stock. Right now I will say there is really nothing to do. I am getting really tight here with a surgical knife, with a scalpel. If the stock pulls back to 33.00ish, that’s when you could buy the stock for a low, kind of a cheat or early entry. If the stock starts to break out above 35.00, as long as the volume is good, that’s where you want to get in.

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