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Do Shell’s Moving Averages Suggest Optimism?

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Shell’s moving averages in the past quarters

In this article, we’ll evaluate Royal Dutch Shell’s (RDS.A) moving averages. Let’s begin by reviewing its moving averages in the past couple of quarters.

In the third quarter of 2018, oil prices fell, and Shell reported that it had missed on its second-quarter earnings, resulting in a fall in its stock and its 50-day moving average. Shell’s 50-day moving average broke below its 200-day moving average by the end of the third quarter. In the fourth quarter, lower-than-expected third-quarter earnings, lower oil prices, and weaker equity markets impacted Shell stock.

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Shell’s moving averages in the first quarter

In the current quarter, Shell published its fourth-quarter earnings results, which exceeded analysts’ estimates. The recovery in oil prices and equity markets in the current quarter have also affected Shell stock and its 50-day moving average.

Shell’s 50-day moving average has fallen 0.8% in the current quarter. A steeper decline in Shell’s 200-day moving average than the decline in its 50-day moving average has narrowed the gap between the averages. Shell’s 50-day moving average, which stood 8.1% below its 200-day moving average at the beginning of the quarter, now stands 7.6% below its 200-day moving average.

The narrowing of this gap is a positive sign hinting at the possibility that its 50-day moving average will cross over its 200-day moving average in the near future. Shell stock is also trading quite close to its 200-day moving average. Any further surge in the stock could lead it to cross over its 200-day moving average—a positive sign. Shell’s moving averages suggest that if its stock continues to rise, it could see a positive breakthrough in the days to come.

Peers’ moving averages

Shell’s peer Total’s (TOT) 50-day moving average is trading 9.0% below its 200-day moving average. Eni’s (E) and Suncor Energy’s (SU) 50-day moving averages are trading 8.7% and 16.1% below their 200-day moving averages, respectively. YPF’s (YPF) 50-day moving average stands 6.6% below its 200-day moving average.

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