I often visit the chart of Valero Energy Corp. (VLO). It's one of those companies that you've gotta love. This oil refiner has such a sweet deal. VLO receives the oil, refines it, then ships it off. The best part is they make approximately $20 per barrel for refining the oil.

I saw this come across the news wire today, "VLO to load 4 mln barrels Algerian crude July 23-29 for delivery to US." I thought to myself, "From a fundamental standpoint, there's no reason I shouldn't buy some shares of VLO and hold." But in order to buy stock, I need more than convincing fundamentals.  I also need a convincing chart.

I pulled the chart up for VLO as I have so many times. This time I saw potential and here's why. VLO has put in a double bottom, broken through the middle valley resistance at 64, and is now retracing to the breakout point. The retrace is typical in a double bottom after the middle valley breakout.

There are two concerning elements in this scenario. First, there is a 38 cent differential in the bottoms. I prefer equal bottoms, but that is not necessarily a must for a successful outcome on this technical formation. Second, the down trend prior to the double bottom was not in effect very long.  Regardless of the two elements I just pointed out, I feel a bullish position should be taken in this stock. I will most likely be buying shares of the stock, or entering a bullish Vertical Credit Spread.

Andy Swan is co-founder and head trader for DaytradeTeam.com.  To get all of Andy's day trading, swing trading, and options trading alerts in real time, subscribe to a one-week, all-inclusive trial membership to DaytradeTeam by clicking here.