Prospects for Shell stock and other oil majors look good as Russia's war in Ukraine crimps global energy supplies. One important metric to look for in a stock is an 80 or higher Relative Strength Rating. Shell just cleared that threshold, with a jump from 72 to 81 Tuesday.
Market research shows that the best stocks to buy and watch typically have an 80 or higher RS Rating in the early stages of their moves.
Shell Stock Rises As Demand Recovers
Shell, like other gas and oil majors, had a bang-up year until the middle of last year. Sales fell off late last year as the Fed's financial belt-tightening led people to cut back spending. But oil prices are on the rise again. They got a boost this week as Opec+ voted to cut production of oil products, lifting prices.
Demand for oil and gas continues to recover as the pandemic recedes. And Russia's war on Ukraine prompted Western Europe, the U.S. and other countries to stop or reduce imports of Russian oil products, giving a lift to Netherlands-based Shell and U.S. giants Chevron, Exxon Mobil and others.
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For its other key ratings, Shell has an 87 Earnings Per Share Rating, out of 99. It also has an 87 Composite Rating, an amalgam rating combining IBD's other key technical and fundamental ratings. Additionally, Shell boasts a perfect A SMR Rating (sales+profit margins+return on equity), on an A-to-E scale. Keep an eye on its Accumulation/Distribution Rating though, which is currently a weak D. That shows that mutual funds, ETFs and the like are selling more of its shares than buying. Look for that to improve to a C or better rating.
Stock Up 5 Of Past 7 Trading Sessions
Shell stock is building a consolidation with a 62.85 entry. See if the stock can clear the breakout price in heavy volume. On Tuesday it fell 1.7% to 59.50 in sync with the market pullback for the day. But Shell stock is up five of the past seven trading sessions, also in sync with the market, which has risen the past few weeks. Additionally, it crossed above its 50-day line Monday and stayed above it Tuesday despite the share price drop.
Shell last quarter reported a 67% leap in earnings growth, on a year-over-year basis, to $2.78 per share. Sales grew 19% to $101.3 billion. Look for the next report on or around May 4.
Shell stock holds the No. 5 rank among its peers in the Oil & Gas-Integrated industry group. Argentina-based YPF and UK-based BP, formerly British Petroleum, are also among the group's highest-rated stocks.
The exclusive Relative Strength Rating from Investor's Business Daily tracks market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price behavior over the last 52 weeks stacks up against all the other stocks in our database.
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