“Crude is back to mid 60 levels off of China trade war tension ease, OPEC cuts are holding steady, and single name stocks in gas related companies like Exxon, ConocoPhillips, Chevron are increasing dividends and either buy backs or returns for longer term investments,” she said. “In general, investors have been under weight this sector, and while we have volume back in the market, treasury yields fallen, and besides gold, this may be an untapped area of the market to look at.”
She said Direxion has seen some positive momentum in its 3x Daily S&P Oil and Gas Direxion Daily (GUSH), Direxion Daily Nat Gas 3x ETF (GASL), and 3x Direxion Daily Energy (ERX).
“Performance of those funds month to date has been near or above 20% in all cases,” she said. “The sector has been on a short-term run.”
Finally, Jablonski said investors should take note of healthcare and biotech.
“We’ve heard positive news around R&D and successful progress in that space from companies like Loxo, Illumina, Bayer, looking to partner and commercialize drugs for various cancers, next generation gene sequencing,” she said. “You’ve had a lot of big news and potential moves in healthcare with CVS and Aetna potentially merging, UNH significant improvements to UNH health care plans, positive ratings, increased revenue streams.”
The sector has been interesting for traders seeking short-term exposure via Direxion’s three ETFs in the space: Direxion Daily Healthcare Bull 3X ETF (CURE), Direxion Daily Pharmaceutical & Medical Bull 3x Shares ETF (PILL) and Direxion Daily S&P Biotech Bull 3X Shares (LABU).
For more ETF news and strategy, visit our current affairs category.