Shell share price UK jumped by more than 5% on Thursday as investors reacted to the company’s quarterly earnings. The spiked to 2,453p in London and to $56 in New York. It has jumped by more than 212% from its lowest level in 2020. This rally made it one of the best-performing stocks in the FTSE 100 index.
Can Shell maintain the trend?
Shell stock price surged this week after the firm published strong results. In its statement, the company said that its integrated gas business brought in $2.3 billion in adjusted earnings. At the same time, its upstream business had over $5.86 billion while its marketing segment had $820 million. Chemicals and products earnings rose to over $772 million.
Shell business benefited from higher oil and gas prices and sustained volume. While prices have retreated slightly recently, they remain significantly higher than where they were a few years ago. As a result, investors anticipate that the company will continue doing well in the coming months.
Shell share price also rallied as investors focused on the company’s capital return program. It will now implement a new $4 billion share repurchase program that will end in the fourth quarter of this year. It also increases its dividends by another 15%. This means that the company will have returned over $26 billion in 2022.
Still, there are concerns about Shell. First, the company operates in an industry that is highly cyclical. Therefore, there is a likelihood that oil and gas prices will start falling in the coming months. Meanwhile, there are risks of windfall taxes in some countries like those in the UK. A windfall tax is a one-off payment that is meant to generate government revenue after an extraordinary situation.
Shell share price UK forecast
The daily chart shows that the Shell stock price UK has been in a strong bullish trend in the past few days. As it rose, it moved to the important resistance level at 2,428p, which was the highest level this year. It has moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved close to the overbought level. It is slightly above the ascending trendline shown in black.
Therefore, there is a likelihood that the Shell share price target will keep rising as bulls target the key resistance at 400p. A drop below 2,264p will invalidate the bullish view.
