SHEL Should I Buy
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Not a good buy right now for an impatient investor. The chart is still broadly bullish, but SHEL is trading just below near-term resistance (77.24) with momentum flattening (MACD histogram still positive but contracting), while there are real event risks into earnings (Feb 5) and a fresh ~$4B arbitration overhang. If you must act immediately, this is better treated as a hold/avoid-new-buy until it either clears ~77.25 with strength or pulls back toward support (74.98) for a cleaner entry.
Trend remains constructive: moving averages are bullish (SMA_5 > SMA_20 > SMA_200), consistent with an uptrend. Momentum is positive but losing steam: MACD histogram is above zero (0.409) yet positively contracting, implying upside momentum is slowing. RSI(6) ~59.7 is neutral-to-slightly-bullish (not overbought), so there’s no strong mean-reversion buy signal. Key levels: Pivot/support near 74.98 (first support 72.72), resistance at 77.24 then 78.64. With price at ~76.49, risk/reward is less attractive for an immediate buy because upside is capped by nearby resistance while downside has room back to pivot/support.
Intellectia Proprietary Trading Signals
Macro/product tailwind: natural gas prices recently surged sharply, which can support integrated gas/LNG economics and trading results if sustained.
Strategic growth optionality: Shell/BP seeking U.S. licenses for Venezuela-linked gas development could open longer-cycle supply growth opportunities.
Nigeria investment plan (up to $20B) signals commitment to upstream/gas projects that can support future volumes/cash generation.
Next catalyst: QDEC 2025 earnings on 2026-02-05 (pre-market) could be a positive catalyst if LNG/trading and shareholder returns beat expectations.
Event-driven overhang: Shell and Eni lost arbitration related to Karachaganak, with liability up to ~$4B—this is a tangible headline risk for sentiment and near-term pricing.
Positioning/flows: hedge funds are reported as selling aggressively (selling amount up ~10019.72% over the last quarter), a meaningful near-term technical headwind.
Sector narrative: multiple analysts cite a tougher 2026 setup (bearish crude outlook, deflating refining margins, portfolio/chemicals restructuring challenges), which can cap near-term upside.
Near-term technical setup: price is close to first resistance (~77.
while momentum is decelerating, increasing the odds of churn/pullback rather than an immediate clean breakout.
Latest reported quarter: 2025/Q3. Revenue declined to $68.152B (-4.13% YoY), but profitability improved materially: Net income rose to $5.322B (+24.03% YoY) and EPS increased to $0.90 (+30.43% YoY). Gross margin improved to 16.98 (+8.29% YoY). Bottom line: top-line softness but strong earnings/margin resilience—consistent with cost discipline and mix/trading strength.
Recent analyst trend is mixed but has tilted more cautious: several downgrades to Neutral/Sector Perform (UBS, BofA, and most recently RBC on 2026-01-26) citing valuation not being “cheap,” chemicals restructuring headwinds, and broader oil/gas/refining margin concerns. Offsetting that, multiple firms still carry positive stances and/or raised targets (Jefferies Buy; Piper Sandler Overweight with higher PT; JPMorgan Overweight; Morgan Stanley Overweight though with a lowered PT). Wall Street ‘pros’ case: strong capital allocation (cost reductions and shareholder returns), differentiated LNG positioning, resilient cash generation. ‘Cons’ case: macro headwinds (crude/refining), portfolio/chemicals restructuring challenges, valuation less compelling after prior rally, and the fresh arbitration liability headline.
