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Profit taking day came to commodity markets yesterday, and the US oil refiners were not spared.

All the refiner stocks were down 4-5% as the sell-off accelerated after the FOMC Minutes release.

After hours, the American Petroleum Institute reported crude oil and refined product builds for the week ending February 15, and were modest. Crude oil was up 3.0 million barrels, Light Fuel Oil down 1.6 million barrels, RBOB down 122,000 barrels.

These were supportive numbers, but you don't run in and catch a falling knife after a six week bull run.

As I have stressed, the uncertainty revolving around the Italian elections this weekend, and the "Sequester" deadline March 1, were warning signals and should have been flashing yellow to aggressive traders.

HollyFrontier (NYSE:HFC), which we recommended at $43 on Jan 9 (closed at $53.72), announced a big quarterly dividend increase last night from 20 cents to 30 cents (ex March 13).

HollyFrontier announced yet another 50 cents special dividend, ex March 1.

HFC can be bought here, because the new dividend rate equates to a $60 stock price at a 2% yield. HFC announces Q4 earnings on February 26. I think they will be good as indicated by the dividend increase.

Yesterday we were stopped out of Tesoro (NYSE:TSO) at $53.60 and Marathon Petroleum (NYSE:MPC) at $82.40 yesterday.

They closed at $52.02 and $80.23 respectively, so the stop loss trading worked.

I am concerned Tesoro's purchase of the BP Carson refinery could be contested by the US FTC.

Tesoro goes ex 20 cents on February 26 but I would not be chasing that stock just yet.

We still own Valero (NYSE:VLO) and Phillips 66 (NYSE:PSX), which are the leading US independent oil refiners.

All the oil refiner stocks still trade at high single digit P/E 2013 multiples, and are good value, but volatile.

I think there may be more downside here though, as sentiment has swayed against stocks at least for a few days.

If you are a buy and hold investor, you hold, and if you don't own these stocks yet, you can average in.

For traders, I would give this downturn at least until after the weekend to sort itself out.

The trend on the DJIA is down right now. So if you are patient, you can pick up these cash gushers at cheaper prices.

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Source: Refiner Sell-Off: HollyFrontier Dividend Bump