Shell Midstream Partners LP (NYSE: SHLX)

Shell Midstream Partners, L.P. owns, operates, develops, and acquires pipelines and other midstream assets in the United States. The company owns interests in four crude oil pipeline systems and two refined products pipeline systems, as well as a crude tank storage and terminal system. Its crude oil pipeline systems include approximately 350 miles of Zydeco pipeline system from Houston to St. James and Clovelly, Louisiana; and Mars pipeline system originating approximately 95 miles offshore in the deepwater Mississippi Canyon and in salt dome caverns in Clovelly, Louisiana. The company’s refined products pipeline systems consist of 158-mile Bengal pipeline system connecting four refineries in southern Louisiana to long-haul transportation pipelines; and approximately 5,500 miles of pipeline connecting refineries along the Gulf Coast to approximately 265 marketing terminals between Houston, Texas and Linden, New Jersey.

Take a look at the 1-year chart of Shell (NYSE: SHLX) below with my added notations:

1-year chart of Shell (NYSE: SHLX)

SHLX has been trending overall sideways since last summer, but mostly downward since last June. Over that time, the stock has formed a trendline of resistance (red), and a trendline of support (green). Any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. So, SHLX definitely seems to have two important trendlines to watch.


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The Tale of the Tape: SHLX is currently stuck between two trendlines. A break above trendline resistance should mean higher prices for the stock, thus a long trade could be made. Short traders might look to enter on a break of trendline support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach