Another Direxion oil ETF, known as the Direxion Daily S&P Oil & Gas Exp & Prod Bull 3X Shares (GUSH), got crushed Tuesday after oil prices retreated.
Members in Pinnacle’s monthly Stock Challenge have been working to take advantage of the leveraged nature of various ETFs in both the gold and oil sectors for years. On Tuesday, the power of leverage backfired on one member as Direxion oil ETF ‘GUSH’ led all decliners.
Direxion’s Daily S&P Oil & Gas Exp. & Prod. Bull and Bear 3x Shares are relatively new ETFs having been created on May 28th 2015.
Direxion Shares ETF Trust Direxion Daily S&P Oil & Gas Exp & Prod Bull falls Tuesday
Direxion Shares ETF Trust Direxion Daily S&P Oil & Gas Exp & Prod Bull 3x Shares lost 24% of its value Tuesday. This ETF has been on a rip since late-February. The ETF recently doubled in price, rising from a low of $2.47 on February 24th to a high of $5.45 yesterday. It closed 5 pennies off its low of $4.02 Tuesday. Now that, is volatility.
Below is an excerpt which provides an overview from the Direxion ETFs | Funds website:
“The Direxion Daily S&P Oil & Gas Exp. & Prod. Bull and Bear 3x Shares seek daily investment results, before fees and expenses, of 300% or 300% of the inverse (or opposite) of the performance of the S&P Oil & Gas Exploration & Production Select Industry Index.”
Canadian oil stocks fell Tuesday as investors took profits from a huge upward move Monday. Brad Carpenter at Cantor Fitzgerald wrote in a note to clients that:
“While market sentiment has improved over the past week, the fundamental oversupply picture for crude has not — and thus, we believes shorts might merely be waiting on the sidelines until the short squeeze and positive momentum wanes.”
High-Grade slips in March Stock Challenge
Despite the setback, High-Grade’s combined average return sat at 16.90% following the close Tuesday – enough for 28th overall.
Another long-time member and past Stock Challenge Champ ‘Rainendown‘ moved into 1st place Tuesday as his combined average return swelled to 70.83%.
Rainendown has been a member for nearly 7 years. There are 6 past Stock Challenge Champs in the Top 20 and 11 in the Top 50 so far.
Pinnacle Digest, and its employees, are not investment advisors; and any reference to specific securities in the list referred to in this article does not constitute a recommendation thereof. THIS IS NOT INVESTMENT ADVICE. All statements in this article are to be checked and verified by the reader. Readers are encouraged to consult their investment advisors prior to making any investment decisions. The information in this article is of an impersonal nature and should not be construed as individualized advice or investment recommendations.
Pinnacle Digest does not endorse or recommend any of the referenced securities. At the time of publication and distribution of this article (4:00PM PST on March 8, 2016) neither PinnacleDigest.com, its employees or consultants owned shares in any of the mentioned companies in this article. This article is intended for informational and entertainment purposes only. The author of this article bears no liability for losses and/or damages arising from the use of this article. This article may contain technical or other inaccuracies, omissions, or typographical errors, for which PinnacleDigest.com and its parent company assumes no responsibility. We do not guarantee that any of the companies mentioned in this article or on PinnacleDigest.com will perform as we expect, and any comparisons we have made to other companies may not be valid or come into effect.
All statements in this article, other than statements of historical fact, should be considered forward-looking statements. These statements relate to future events or future performance. Much of this article is comprised of statements of projection. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements.