Tuesday Morning DK

Gator's Chart of the Day: DK

Delek US Holdings Inc. is a domestic oil and gas refiner/marketer with operations in Texas and Arkansas and some pipeline interests to the gulf coast.  The company reported on August 7th and they had solid numbers.  The forward P/E is under 9 and there is a 5% short interest.  With a market cap of $1.54B it's not a big player but it is profitable and looks ready to make another move higher.  Analysts have a price target of 32.51.

Looking at the chart the earnings pop is obvious and the stock has been consolidating since then.  The Bollinger bands are snugging up but not tight enough yet to qualify as a Fitz squeeze (6% of the 20 day sma) so we may have a few days before the next move but I don't think it's too early to take a bite.

The Trade
I like a 1/4 position right here with a stop just below Thursday's low (25.00).  That's about a 5% risk.  A move to the analyst's target would be a 22% return so the reward is 4x the risk.  That's worth taking.

The all-time high is 27.51 and I would triple the position size when it clears that level by a dime and put the stop around 26.40.  The last quarter of the position would be added when the second chunk is about a dollar to the good.