Oil refiner Valero Energy fell sharply in recent weeks, but dip buyers may see opportunities.

The first pattern on today’s chart is the price area between about $126 and $130. VLO chopped at these levels in August before surging to an all-time high in September. It’s holding that zone again, which may suggest it’s become support.

Second, the price area matches approximately a 50 percent retracement of the rally between this year’s low and high.

Third, stochastics are rebounding from an oversold condition.

Next, VLO hit a two-month low on Monday before reversing back into the range. The resulting “hammer” candlestick could be a bullish reversal pattern after the preceding drop.

The simple moving averages (SMAs) also give potential signals because the 50-day SMA had a “golden cross” above the 200-day SMA in early September. Prices are additionally now trying to hold the 200-day SMA.

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