SHEL Momentum Strategy

For Australian traders, SHEL.L via CFD is often most accessible through IG, CMC, or Pepperstone. ADRs via IB require USD funding. SHEL.L trades during evening AEST which is convenient. 1 ADR = 2 ordinary shares, so pricing differs significantly.

Shell trades around £25 (2500p) vs BP around £4.50 (450p). This is just nominal pricing - it doesn't mean Shell is more expensive in valuation terms. For position sizing, you'll hold fewer Shell shares for the same position value.

Shell is the world's largest LNG trader with significant integrated gas operations. Gas prices matter more for Shell's earnings than BP's. While both correlate with oil, Shell has additional gas/LNG sensitivity that can cause it to outperform or underperform BP.

SHEL.L trades on the LSE from 5 PM to 1:30 AM AEST. This is Australian evening/night. You can analyze during the day and place orders for London open, then check results in the morning. US ADRs trade 11:30 PM - 6 AM AEST.

In 2022, Shell simplified its structure by eliminating the dual A/B share structure and becoming simply Shell plc (SHEL.L). Historical data may reference RDSA or RDSB - these merged into SHEL. Ensure your data is continuous across this transition.

Shell's large LNG business means gas price moves can impact Shell differently than BP. When gas prices rally strongly (especially European TTF or Asian JKM), Shell may outperform BP. Check both oil AND gas when analyzing Shell. Strong LNG quarters can surprise to the upside.

Close or reduce positions 2-3 days before earnings. Shell's LNG trading results can be volatile and surprise the market. After earnings, wait for reaction to settle before entering new positions based on the new trend direction.

Generally no - they're highly correlated (0.8-0.9). Holding both is essentially doubling energy major exposure without diversification benefit. Choose the one with better technicals/fundamentals, or limit combined positions to <7% of portfolio.

Common causes: 1) LNG-specific news (cargo pricing, contracts, projects), 2) Earnings surprises (especially integrated gas segment), 3) Buyback announcements, 4) Geopolitical (Shell exited Russia in 2022), 5) Currency moves (GBP). Investigate divergence before trading.

SHEL.L is priced in GBP. Your profit/loss depends on both Shell's share price AND GBP/AUD exchange rate. If Shell rises 5% but GBP falls 3% vs AUD, your AUD return is only about 2%. Consider currency exposure in overall risk assessment.

Use fundamentals as a filter: Strong LNG results, active buybacks, good cash flow = Full conviction on technical signals. Weak LNG, falling production = Reduced size. Shell's quarterly reports focus heavily on integrated gas - pay attention to LNG volumes and trading profits.

Use 5-10 years but be aware of 2022 corporate restructure (share consolidation). Include 2014-2016 (oil crash), 2018-2019 (recovery), 2020 (COVID crash and dividend cut), 2021-2022 (energy crisis). Note data continuity across RDSA/B to SHEL transition.

Favor Shell when: 1) Gas/LNG prices rallying more than oil, 2) Shell's LNG results strong, 3) Shell's relative strength vs BP positive, 4) Shell announcing buybacks. Favor BP when: 1) Oil leading gas, 2) Transition sentiment positive (BP more aggressive). Often similar - choose based on technicals.

Target Sharpe ratio > 0.5, ideally > 0.8 for single-stock momentum. Similar to BP due to high correlation. Single stocks have higher volatility than diversified portfolios, so lower Sharpe is acceptable if absolute returns are good.

Shell offers: International exposure, GBP diversification, massive LNG business (relevant given Australia's LNG exports). Local alternatives (Woodside, Santos): AUD exposure, Australian regulatory environment, different asset bases. Shell adds international diversification but compounds overall energy exposure.