SHEL Momentum Strategy

Shell offers unique LNG exposure as the world's largest LNG trader. It has smoother price trends than BP (easier for momentum trading), and provides diversification from pure oil plays. Good liquidity on multiple exchanges.

For Singapore traders, the US ADR (SHEL) is practical as it trades during Singapore evening hours (9:30 PM - 4 AM SGT). No UK stamp duty on ADR, and it trades in USD. London shares may have tighter spreads during European hours.

LNG is Liquefied Natural Gas - natural gas cooled to liquid form for shipping. Shell is the world's largest LNG producer and trader. LNG prices significantly impact Shell's profits, sometimes independently of oil prices.

Risk 2% of account per trade. Use 2× ATR stop. Calculate position size = (Account × 2%) / (2 × ATR). Maximum total Shell exposure should be 5% of portfolio.

Avoid 5 days before earnings announcements. Be cautious around OPEC meetings and major LNG news. Reduce exposure when both oil and LNG are in choppy consolidation.

Shell's significant LNG business means LNG prices matter. Shell momentum + Brent bullish + LNG stable/bullish = high conviction. If oil is bullish but LNG is crashing, Shell may underperform - reduce conviction.

Weekly sets major bias (above/below weekly 20 MA). Daily provides entry signals. Only take daily momentum signals aligned with weekly. Shell's smooth trends make multi-timeframe particularly effective.

Both bullish = sector move (high conviction). Shell bullish + BP bearish = Shell-specific (investigate LNG). Shell lagging BP = potential catch-up or Shell-specific weakness. Use BP as confirmation for Shell signals.

Options: ATR trail (2× ATR from favorable price), 20 MA trail (exit on close below), or swing point trail. Shell's smoother trends often allow longer trailing than BP. After 1× ATR profit, move stop to breakeven.

Winter (Nov-Feb): Peak Asian LNG demand, often bullish for Shell. Summer: Lower demand but restocking can support. Cold snaps or supply disruptions can spike LNG and lift Shell regardless of season.

Calculate RSI(14), MAs (10,20,50), ATR(14). Long: RSI crosses above 50 + Close > 20 MA + Energy confirmed. Size: Full if > 50 MA, half if below. Stop: 2× ATR. Filter: No earnings within 5 days. Energy filter: Brent bullish AND LNG not bearish. Exit: Opposite signal, stop, or 20-day time stop.

Buy calls for bullish signals (defined risk), puts for bearish. Use 30-45 DTE. Spreads reduce cost. Shell's lower volatility means cheaper premiums than BP. For earnings: straddles/strangles capture volatility.

Energy trend (oil + gas above/below 50 MA). LNG-driven regime when JKM spiking while oil flat. Shell outperforming peers = LNG regime. Energy bear: Shell shorts, quick profits. Energy range: Reduce trading.

Track Shell, Brent, JKM (LNG), BP. All bullish = highest conviction. Shell + Brent bullish + LNG neutral = oil-driven. Shell + LNG bullish + Brent neutral = LNG-driven (Shell-specific strength). Multiple confirmations increase probability.

Per-trade: 2% risk. Total Shell: max 5% exposure. Total energy sector: max 10%. If also trading BP, watch combined energy exposure. Track attribution by signal type, LNG impact, and regime.