The Shell share price surged yesterday after Europe’s largest oil company revealed bumper profits and announced a $2 billion buyback operation.
Royal Dutch Shell Plc (LON: RDSA) yesterday reported second-quarter earnings per share (EPS) of EUR 51.29b, far exceeding analysts’ expectations of EUR 51.14 billion.
However, revenue came in at EUR 51.29b, below consensus estimates of EUR 66.07b.
But it was the announcement of a $2 billion buyback programme for 2021 and an increase in the interim dividend payment for the second quarter that excited the market.
The resulting surge in the share price has the bulls wondering if RSDA can once again scale the elusive 1,500p barrier.
Looking at the daily chart, a clear level of resistance is visible above 1,500p.
After closing at 1,518p on March 6th 2020, the price gapped lower the following day and proceeded south to the 846.80p pandemic low.
Despite several attempts in the last year, the Shell share price has failed to fill the gap.
Almost exactly a year later, on March 12th 2021, Shell topped out at 1,509.2p. Although by the 26th of April, the price had retreated to 1,286.60p.
Yesterday’s rally lifted the price to 1,438p by the close and within just 5.7% of 1,518p.
If Shell clears this significant resistance, the path to 2,000p offers few obstacles.
Furthermore, the price is now above the 50, 100 and 200-day moving averages at 1,375p, 1,366p and 1,296p, respectively.
The bullish view is reliant on RDSA staying above the 200 DMA at 1,269p. And the outlook becomes increasing positive above 1,518p.
Although should Shell lose the support of 1,269, the immediate bullish outlook becomes invalid.