By L.A. Little of tatoday.com, author of Trade Like the Little Guy.

One sector that has continually underperformed is the refiners. Look up and down the list and all of them have had squeezed margins for a very long time now. Although it isn't clear if that logjam has broken, it is clear that

Western Refining

(WNR)

has had larger buyers stepping in for a while now. That seems to suggest that they see value. Let's see if we can too.

On the long-term time frame, it is very hard to see the value unless you believe that a $61 decline necessarily creates value.

Now maybe it does, but that sure is hard to buy. What's to keep a $63 decline from creating value which would be another 40% decline from here?

Our examination of the swing points are not of much help either since this chart remains

confirmed bearish

. In fact, on this time frame, there is very little to give a bull any comfort.

Now we can see a support zone where the most recent break below the swing low is in the process of being recaptured (the last two bars). That's a small positive. If this chart is finally starting to bottom, the overhead resistance on this time frame will be felt once price makes it back to the bottom of that high volume bar from June 2009.

So with the monthly chart reasonably pathetic, what about the weekly? Here we can see that a persistent downtrend has been in place for the last nine months.

Other than a few small forays outside the channel occasionally, for the most part prices have been contained quite well by the channel. The trend is confirmed bearish here as well and again there seems to be no reason for hope. The small ray here is the high volume spikes to the upside during the downtrend.

So with such a painful set of charts, why in the world would we think to buy WNR? It's on the daily that you can find the trade and, although the journey north will be painful when it occurs, it has to start somewhere unless this company is in the process of disappearing or set to languish at the lows forever.

On the daily chart we see large spikes higher with huge volume thrusts. The last spike up produced a confirmed change in trend and the recent trade back to $4.70 hasn't produced a push lower as of yet. With the idea that the biggest money made is at the edges, we seek a position in WNR. With a confirmed change in trend, this is a good reward-to-risk setup with target zones at the Jan. 1 highs and then again at the $5.80 mark. To see exactly how I'm trading this from the long side, take a look at the more detailed video presentation here.

WNR - A Trade for Now and Later: One Minute Trade

So, until next time, keep trading the charts!

At the time of publication, Little was long Western Refining, though positions can change at any time.

L.A. Little, author, professional trader and money manager, writes daily on

www.tatoday.com

, a free educational site for traders and investors. He has been featured in numerous publications and is the author of

Trade Like The Little Guy

.

His background includes degrees in philosophy, computer science, computer information systems and telecommunications. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, L.A. espouses a simplistic technical approach to trading the markets that is a throwback to the days of past. With a focus on swing points and the qualification of trends, L.A. provides a breath of fresh air to an otherwise crowded room of derivative indicators with the emphasis on technical minutiae.