Why I'm worried about Shell
25th May 2023 07:25
by Alistair Strang from Trends and Targets
Shell's share price still trades near historic highs, although recent movements have been just as chaotic as the company's AGM. Independent analyst Alistair Strang explains his own price forecast.
While we count the minutes down to Monaco and what’s generally the most boring Grand Prix of the year, it’d be churlish not to review something fuel related. Shell (LSE:SHEL) recently revealed astounding profit levels and allowed climate protesters to invade its AGM while going on to defend its own emissions targets.
What remains odd is that the media still attributes Shell's doubling of profits to Ukraine, ignoring the reality of the jump in oil and gas prices occurring in the three months before the war began. Thankfully, the pain of high fuel prices has eased considerably with our local fuel station here in Argyll selling Diesel at 129p/litre and Unleaded at 134p/litre.
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Since March, Shell's share price movements have been just as chaotic as the company's AGM. The price has pretended it’s going to go up, then produced a feint downward which also proved fake. But now, we’re a little worried, thanks to the share price carefully following an invisible path below the Red uptrend since 2020. The chart extract, showing the precise closing prices for each session, begs the question, is this a warning for coming problems?
From an immediate perspective, if we take recent behaviour as a sign of nerves, it appears below 2,320p risks triggering reversals to an initial 2,216p with secondary, if broken, down at 2,096p and hopefully a bounce.
Just for light relief, we’ve decorated the chart with a third level drop target should the secondary break as 1,889p calculates as possible.
However, our inclination is to suspect Shell shall discover a reason for a share price boost. Unfortunately, it needs above 2,496p to convince us of something useful happening, as this works out with the potential of a visit to an initial 2,629p with secondary, if bettered, at 2,784p and doubtless some hesitation due to prior highs in 2018.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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