Do Shell shares have more in the tank?
Up 10% in the past month to their highest since September, this oil major's shares looks interesting, according to independent analyst Alistair Strang's charts.
15th January 2025 07:38
by Alistair Strang from Trends and Targets
We’ve an intense dislike of being positive about oil company share prices, simply due to the logical (but usually faulty) assumption oiler shares enjoy a direct correlation to the price of Crude oil. Sometimes this assumption is right for a while, sometimes not, and usually any perceived link diminishes quickly. In the case of Shell (LSE:SHEL), their share price has started to enact something which is quite interesting from our confused perspective.
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The level at which the share price broke the RED uptrend was around 2,633p. Since then, the price has mucked around to a degree and now actually has closed a session above the level of trend break.
In accordance with our “Book of Rules”, this should prove significant, essentially suggesting this historical Red trend since 2020 should be ignored as it’s no longer viable.
In terms of future share price calculations, this throws a fairly major spanner in the works, as we dare not rely on price fluctuations against the Red trend to calculate future potentials. Our in-house logic is fairly basic, giving rise to a thought that if the market doesn’t respect the trend, why should we?
It’s easy to become pedantic about this sort of nonsense but, invariably when a share price exceeds the level of trend break, it proves (to us) the prior trend was a load of nonsense. In other words, the Shell share price uptrend since the contrived pandemic low of 2020 was a load of fictional rubbish and should now be ignored.
We’ve painted another line in a colour the software assures is Magenta, basically a Hail Mary hope the market shall adhere to such an imaginary instrument. In truth, “the market” should be accurately reflected as traders who want to believe, due to everyone searching for a new god to follow.
Our own god is less forgiving, demanding we ignore a prior Red uptrend when a share price exceeds it. To be blunt, the frequency of this happening has tended to engrave “the rule” in Big Granite Letters in our in-house assumptions, often creating a scenario which must be believed.
In the case of Shell, it’s currently the case where above 2,674p should trigger movement to an initial 2,761p with our secondary, if bettered, at a longer term 2,888p. Neither argument is particularly exciting, though we do anticipate some hesitation around 2,888p, just because it clashes with prior highs.
We’ve an assumption folk trapped at such a level since 2018 shall decide to bail, retrieving their investment rather than risking the imminent threat of taking some profit. Honestly, we cannot lecture as we’re perfectly capable of “Bailing At Break Even” (Babe) rather than risk waiting for another lifetime to pass to retrieve our holiday savings.
Overall with Shell, the share price is hovering in a zone where we must regard a long-term 3,751p as introducing a greater attraction.
Should things intend to go wrong for Shell their share price needs leak below 2,400p to trigger reversals to an initial 2,209p with our secondary, if broken, calculating at 2,177p and a very probable bounce position.
But for now, we’re inclined toward optimism for this share.
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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