This article is for education purposes only, and not to be taken as advice to buy/sell. Please do your own due diligence before committing to any trade/investment.
The price of oil has been steadily climbing since the middle of 2020; that’s a full 2 years now.
Though the best time to position trade oil and stocks in the energy sector was back then, are there windows of opportunity which you can still seize?
Based on technical analysis, it looks like there’s a forgotten counter in the energy sector that’s starting to emerge – HF Sinclair (NYSE: DINO).
Brief History of HF Sinclair
HF Sinclair was founded way back in 1947 and has been dealing with oil from day 1.
Over the years, HF Sinclair diversified to real estate and was listed in 1955, only 8 years after being founded.
Through sound business acumen and the industrial boom, HF Sinclair shot into the Fortune 500 list of largest US industrial corporations. Did the company rest on its laurels?
No. It continued to work hard and expanded its business through joint-ventures, acquisitions, and excellent management to become the oil giant we know today.
Business Model and Financials
HF Sinclair has grown its business offerings over the years. Has this positively impacted its financials?
Let’s have a look.
HF Sinclair’s revenue was negatively affected in 2016, 2019 and 2020 (when the COVID-19 pandemic broke out). Apart from these 3 years of revenue decline, growth has been strong for HF Sinclair.
Its net income dipped in 2016, 2019, and 2020, while it experienced strong growth in its income for the other years.
How did HF Sinclair recover from the slump brought by COVID-19?
Post COVID-19, HF Sinclair’s business rebounded sharply. Its revenue jumped by 64% while its net income took off by 191%! This boosted investors’ confidence through a sharp rise in its share price which you’ll see in the next section.
Without naming all of HF Sinclair’s products and businesses, it refines oil, produces jet fuel, renewable diesel, specialty lubricants, and modified asphalt.
From the table above, you can also tell that HF Sinclair has entered the renewable energy space.
In addition, HF Sinclair has taken environmental, social, and governance (ESG) seriously. Here’s what it has achieved so far.
As demand for oil and petroleum products increases, HF Sinclair is well poised for growth.
Are you thinking otherwise?
Research has shown that the consumption of oil has been rising due to an increasing population worldwide. Though renewable energy is available, it comes with many tall hurdles such as infrastructure. If this interests you, you can read it in this recent article on the energy sector.
After an overview of HF Sinclair, shall we proceed to have a look at its price chart to find out if there’s an opportunity for position trading its shares?
Technical Analysis on HF Sinclair (NYSE: DINO)
HF Sinclair’s share price performance has been outstanding in the past 2 weeks!
Shall we see what the technical indicators tell us?
From the chart above, you can see that there’s a green arrow beneath its latest candle.
You can also see that the bar of its Trend Impulse Factor has turned dark green.
Both indicators suggest that the bullish momentum is extremely strong and that HF Sinclair is one stock in the energy sector that you’ll want to keep a close eye on.
There’s something else I like about the chart of HF Sinclair. Its share price has formed a new 52 week high. This is no easy feat and I think that there’s a high chance of its share price to rise further.
However, you’ll need to note that the combination of the green arrow and dark green Trend Impulse Factor bar was first seen in early May 22. This is significant as this is the second up wave. As such, you may not want to be more prudent trading HF Sinclair.
The demand for oil and oil related products will continue to rise, at least in the next few years.
Being a diversified company with a proven track record by its management, the future of HF Sinclair looks rosy. But as for everything in life, challenges may pop up along the way.
Because this isn’t the first up wave, position trading the shares of HF Sinclair could be slightly riskier. Taking this into account, you may want to be more prudent.
Here’s what you’ll want to know about the green arrow and Trend Impulse Factor indicators. They are part of the TradersGPS (TGPS) to help you decipher if a stock is a cut above its peers. You won’t have to feel in the dark and make wild guesses.
What are your thoughts? Share your thoughts with us below!
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