Certainly, the news surrounding the recent attacks on a Saudi refinery had shaken the markets a bit, creating slight uncertainty of what to expect now. Of course, the profitability of some businesses, like airline companies, will be hit by higher fuel costs, but there are companies which will benefit from the rise in the price of the black liquid. For now, the big oil companies like Royal Dutch Shell Plc (AMS: RDSA) might enjoy the higher price in oil, as it could lead to higher returns. Looking at the stock from the technical perspective, after finding good support near the 24.50 hurdle on August 15th, RDSA slowly moved north. Today, after the European opening bell today the stock started its trading day with an upside gap. For now, it seems that there could still be room for some more upside, especially if the price of oil continues to rise, hence why we will take a more bullish approach on the stock for now.
A break of the 26.57 barrier, marked by the high of August 8th, could invite more buyers into the game and the stock could travel further north. We will then aim for the 26.81 obstacle, a break of which could set the stage for a test of the 27.49 hurdle, marked by the high of August 1st. This is where the price could slow down its uprise, or even correct back down from there. But as long as RDSA remains above the 26.81 zone, we will continue examining the upside, at least for a while more. The stock could then climb back up again, as new investors might see it as a good opportunity to step in. If the share price bypasses the 27.49 barrier, this might open the door to the 28.01 level, marked by the low of July 18th.
Our oscillators, the RSI and the MACD, are somewhat in support of the above-discussed scenario. The RSI is now above 50 and continues to point higher. The MACD is still below zero, but after bottoming in mid-August, it started moving higher, while running above its trigger line.
Alternatively, if the price falls back below the 26.10 hurdle, this may start raising concerns over its short-term upside potential. But if the stock slides below the 25.84 zone, marked by the high of Friday, this could force RDSA to move lower, possibly aiming for the 25.36 area, marked by the low of September 12th. If that area is just seen as a temporary obstacle on the stock’s way down, a break of it could send the price to the 24.84 barrier, or even lower, to the 24.50 level, marked by the lowest point of August.
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