The rise in crude has oil stocks surging this year, but there's one group that hasn't participated in the rally: The refiners.
Shares of Valero, Tesoro and Marathon Petroleum have all fallen double digits in 2016—down 24, 29 and 26 percent respectively. Even worse for investors in those companies, the already dismal returns may lead to even more pain on the horizon, according to one trader.
Andrew Keene, CEO of AlphaShark, sees oil refinery stocks falling in the near future, even as many of them have gained some momentum from the February lows. One stock that could be in the biggest trouble is fuel manufacturer and transporter Valero, which Keene says has been in a steady downtrend since mid-March.
"The oil refiners are headed lower," he said.
Looking at both a daily chart and a weekly chart for Valero, Keene points out that the stock is on a "clear bear channel to the downside" with a downside target at the prior low $52. But Keene believes that Valero can very possibly fall even lower than that key technical level.