Marathon Oil Corp. (MRO) was recommended at the same time as VLO as longs were established at an average price of $30.19 when MRO pulled back to $29.70 on November 8.
For United Parcel Services (UPS), longs were established in early November at $72.17 (including commissions).
What it Means: The stock index futures are a bit lower in early trading, and I would expect some consolidation or a pullback in the next few days. This should be a good buying opportunity.
In December, new positions were established in the Select Sector SPDR Consumer Discretionary (XLY) and positions were added in the Select Sector SPDR Financial (XLF) and Select Sector SPDR Health Care (XLV). Positions were also added in homebuilding (XHB) and retail (XRT).
The buy levels for the five stocks recommended in 5 More Stocks For Your Stocking were hit with only McDonald’s Corp. (MCD) being stopped out for a 2.6% loss. My stop at $87.22 was apparently too tight as the low was $86.81.
As I discussed in two articles last year, stop placement can be more of an art than a science and that is why I included Marathon Oil Corp. (MRO) and United Parcel Services (UPS), so that you can learn both when my stops work and when they don’t.
In hindsight, the stop in UPS was too tight, while I think my stop in MRO would have held in the majority of instances.
How to Profit: For Select Sector SPDR Materials (XLB), go 50% long at $38.06 and 50% at $37.72, with a stop at $35.86 (risk of approx. 5.3%).
For Valero Energy Corp. (VLO), on longs from $29.27, use a stop at $32.54. Though the chart looks strong and a rally to $38-$40 is possible, I would stick with my original plan and sell ½ at $35.98 for at 22.9% gain.
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