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Shell share price forecast: rising wedge forms ahead of earnings

on May 2, 2022
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  • The Shell share price has formed a rising wedge pattern.
  • The company is expected to publish mixed results.
  • Other energy stocks have moved sideways after publishing results.

The Shell (NYSE: SHEL, LON: RDSB) share price is in a tight range as investors wait for the company’s quarterly results scheduled for Thursday this week. It is trading at 2,173p, where it has been in the past few days. This price is close to its year-to-date high of 2,238. It is also about 155% above the lowest level in 2020.

Shell earnings preview

Shell, like other large oil and gas companies, has had a spectacular performance this year. Indeed, the Vanguard Energy ETF has risen by over 30% this year and outperformed other sectors like finance and technology. 

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This rally happened as the price of crude oil and natural gas surged. Natural gas has risen to the highest level on record while the price of crude oil has moved above $100.

At the same time, oil demand has outpaced supply in the past few months as the world reopens from the Covid-19 pandemic. 

Therefore, analysts expect that Shell will announce mixed quarterly results on Thursday. While its organic revenue is expected to grow, the company will suffer charges related to its exit from Russia. Analysts expect that its revenue rose to $44.8 billion while its profit-per-share fell to $2.9.

Other energy companies have also reported mixed results. For example, Exxon Mobil earned $5.5 billion in the first quarter as its revenue rose to $90.5 billion. It took a $3.4 billion charge due to its Sakhalin-1 operation in Russia.

The situation was different in Chevron, a company that has no operations in Russia. As a result, the company’s profit rose from $1.37 billion in Q1 of 2021 to $6.3 billion in Q1 of this year. Its revenue rose to over $54.37 billion. 

Meanwhile, TotalEnergies announced strong results, which pushed the management to boost its dividend and share buybacks. 

Shell share price forecast

The daily chart shows that the Shell stock price has been in a strong bullish trend in the past few months. As a result, the stock remains above the 25-day and 50-day moving averages. The Stochastic Oscillator and Relative Strength Index (RSI) have moved above the neutral level. 

Notably, the stock has formed what looks like a rising wedge pattern that is shown in green. Therefore, there is a likelihood that the shares will have a pullback after delivering its quarterly results this week.