Does Royal Dutch Shell Support a Turnaround?

With shares of Royal Dutch Shell (NASDAQ:RDSA) trading around $65, is RDSA an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework.

T = Trends for a Stock’s Movement

Royal Dutch Shell operates as an independent oil and gas company worldwide. The company explores and extracts crude oil, natural gas, and natural gas liquids. It also converts natural gas to liquids to provide fuel and other products, as well as engages in manufacturing, supplying, and shipping crude oil. The company holds interests in approximately 30 refineries, 1,500 storage tanks, and 150 distribution facilities.

Last week, Royal Dutch Shell became the latest firm to bail on efforts to transform Western Slope oil-shale rock into oil, announcing that it is abandoning its Mahogany project in Colorado. In February 2012, Chevron (NYSE:CVX) ceased its oil-shale research in Rio Blanco County. Shell spokeswoman Kelly op de Weegh said: “The energy markets have evolved since we started the project in 1982. We are exiting our Colorado project to focus on other opportunities.” The target of the Mahogany Research Center has been to turn oily shale rock into liquid by heating the rock in situ and pumping it out.

T = Technicals on the Stock Chart Are Mixed

Royal Dutch Shell stock has struggled to make positive progress this year. The stock is currently trading near the lower end of its yearly range, so it may find support at current prices. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Royal Dutch Shell is trading between its key averages, which signals neutral price action in the near term.

RDSA

Source: Thinkorswim

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