Something occurred today that I've been expecting but in all honesty I had no way of knowing when it would happen. And, frankly, I was a little surprised that it reared its ugly head today.
What I'm talking about is this:
With Carl Icahn in the news all week and before, CVRR has been a direct beneficiary with a strong ascending line amply evident. In the background, Tessoro, Delek and ALDW have also garnered some attention although hardly to the same degree as CVRR.
Today, though, shows us something different and should not be ignored by traders or investors alike:
Momentum always speaks louder than words and today the first crack in the CVRR/Icahn wall showed us its ugly face. Today---surprise!!!--- CVRR showed a strong gain in morning hours only to lose all the steam packed within, coming out of the day flat---right to the penny flat, at that.
At the same time, ALDW was up strongly in the morning hours but things faded miserably by noon eastern time, only to rally in the closing moments of the session, winding up with a 19 cent gain.
Nineteen cents is outstanding for two reasons---
1. nineteen cents marks the strongest single day gain of the week.
2. It occurred on the very day that CVRR FAILED TO GAIN!
The big deal here is that we're witnessing a reversal. Given the strength of the gain, we now have a showing of a reversal backed up by conviction as is evident in the momentum strength.
A third analytical item to be noted:
CVRR is the one of the refiners touted as most likely to benefit by the Icahn news but CVRR came up dead flat today while ALDW showed great strength--- without any news to explain things.
In simple terms--- CVRR may have run its course to the upside and will now have to find support through performance or a political event linked directly to the company. Contrast this with ALDW which clearly has its own legs without dependence upon political goings-on. I much prefer ALDW's situation.
My take-aways:
This is why I advised yesterday that my board buddy take his profits BEFORE suffering a marketplace decay factor I think reasonable to expect. We may have seen the tip of the iceberg today. Not to say CVRR will drop next week but I'm more confident that ALDW will outperform CVRR. I can't see value in needless risk.
ALDW's showing this week was very strong. Some of the momentum probably could be attributed to the Icahn/Trump connection, sure! But ALDW's gain today took place without any political news accounting for it whereas CVRR lost its morning glow.
My voice is just one, there are many others to be heard and considered.
I'm holding no position in CVRR as I find no evidence whatsoever to offset risks associated with the company's very poor performance over the past year and a half... and likely to continue indefinitely.
That spells a gloomy picture for diehard believers. Fortunately, there are many better performing stock picks out there ripe for the plucking.
Good hunting, folks!
