Morgan Stanley says investors can find more attractive entry points in the energy sector several months out, indicating that there is no need to bottom-fish at current levels.
Should energy sector ETFs see more waning momentum, which is exactly was seen Tuesday, the UltraShort Oil & Gas ProShares (NYSEArca: DUG) and the Direxion Daily Energy Bear 3X Shares (NYSEArca: ERY) could prove to be winning trades. ERY attempts to deliver three times the daily inverse performance of XLE’s underlying index while DUG is a double-leveraged inverse play on the Dow Jones U.S. Oil & Gas Index.
“In mid-2008, short interest as a share of float for the average financial stock peaked at 11.7 percent, a tick higher than the current level for energy equities, according to the report,” adds Bloomberg.
Energy Select Sector SPDR
