Market Analysis

Shell: From oil to green electricity. Will this boost the share price?

Royal Dutch Shell is one of the world’s largest oil and gas companies. However, the company has recognised the signs of the energy turnaround and is working to equip itself for the future. The company’s ambitions are electricity and sustainable energy. As the Financial Times reported yesterday, Shell is committed to becoming the world’s largest green electricity company. The company aims to achieve this goal by investing one to two billion US dollars a year in new energy companies.

The oil business currently accounts for two-thirds of the Group’s business. This distribution is expected to change within the next few decades so that the company’s sales of oil, gas and electricity will be roughly equal.

As always, with such large-scale restructuring attempts, only the future will show whether this will succeed.

The chart showed a clear upward trend until the first half of May 2018, and then there was a downward correction that lasted into the second half of December. From then on, the market slowly worked its way up to €28. This range should also have a decisive influence on whether the market can show higher prices in the short term. If the stock leaps this level, the next significant resistance could be in the €28.77 range. If the stock can break through here, the upper edge of the gap from October 2018 could be the next resistance, with a significant structural level waiting in the €29.80 range.

However, if the market cannot overcome the €28 range, prices could fall further. Support could be given to the market at €27.20. If the market sinks further and finds no support at €26.26, a new valuation will be needed, because the picture could then cloud over.

The MACD indicator is pointing down, and the MACD line is below its trigger line. The histogram is negative but could show some signs towards the zero line. Should the indicator turn in, this could be supportive.


RDSA.NE - daily chart. Source: ActivTrader

RDSA.NE Daily Chart | Source: ActivTrader


Written by Daniel Schuetz, External Analyst


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