RE: RDSB & oilies1 Nov 2020 11:22
Interesting thoughts Marfthew. It demonstrates how, depending on their respective starting points, different investors will find themselves with different calculations to make concerning management of their RDS investment through trading.
With no heed to news, market factors and OP, a trend watcher might easily look at RDS in isolation and think a breakout is currently on the cards. Since it touched 845 on Wednesday, it has been swimming strongly against the tide to get to 933, climbing around 80p even as Brent continued to fall by a further $1.3 - ordinarily worth about 25p off RDS. This was entirely on the strength of the Q3 statement and dividend policy announcement. If the tide were to turn favourably, OP recovering to say $40+, then RDS would seem set fair to break out of that downward channel. However, the increasingly gloomy COVID backdrop in Western countries makes that prospect seem less likely. My thoughts are that the Q3 Statement was enough to put RDS ‘back on the shelf’ at 890+ and that it is unlikely to revisit 845 provided that Brent does not drop below $37. I don’t happen to think that gaps operate the same way for commodities as for sp’s but, notwithstanding that, $37 appears to be a vulnerable level for Brent: https://invst.ly/so42v . Optimists could, of course, argue that RDS was 1200+ during much of May whilst Brent hovered around $35 - so my concern about Brent is misplaced and the sp may well continue to float upwards even without a boost from OP. I think we’ll get a strong hint about that in the next few days.
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