Bears hibernate during the winter months, but on the back of extended declines for oil and Russian equities, the Direxion Daily Russia Bear 3x Shares (NYSEArca: RUSS) is far from sleepy.
Brent oil, the contract Russia prices crude in, for February delivery is off 5.4% to $53.37 at this writing while the United States Brent Oil Fund (NYSEArca: BNO) is lower by 5.2% on volume that is already nearly double the daily average.
BNO has plunged 43.6% over the past 90 days. Confirming its correlation (and vulnerability) to oil prices, the Market Vectors Russia ETF (NYSEArca: RSX), the largest and most heavily traded Russia ETF, has shed 35.5% over that period. [Russia ETFs See Surprising Inflows]
RUSS is the triple-leveraged equivalent of RSX as the former seeks to deliver three times the daily inverse performance of the Market Vectors Russia TR Index, RSX’s underlying index. With the path of least resistance for oil and Russian stocks being to the downside, RUSS becomes an increasingly alluring idea for the risk-tolerant trader
“On the RSX daily chart, you can see a bearish pennant formed. The RSX is under $15, which means a breakdown is now on the table. Any further weakness likely sees an actionable short trigger from here,” according to Chessnwine of Market Chess.