If oil prices were a roller coaster, 2020 would make even the bravest stomachs a bit queasy. However, the tide could be turning for the commodity and ETFs like the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH), which has rallied in December.
GUSH seeks daily investment results equal to 200% of the daily performance of the S&P Oil & Gas Exploration & Production Select Industry Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.
The index is designed to measure the performance of a sub-industry or group of sub-industries determined based on the Global Industry Classification Standards. Its 3-month trailing returns have been over 60% per Morningstar numbers.
GUSH is trading below overbought levels. A relative strength indicator (RSI) and moving average convergence divergence (MACD) filter, show the exponential moving average line dipping below the signal line, which could mean GUSH could head lower. It could be a wait and see moment for GUSH to see if that December rally still has legs heading into 2021. If so, traders may have a buying opportunity ahead for a New Year’s bounce.
A December in a Year Nobody Wants to Remember
2021 has been a December to remember. Per a Direxion Investments blog post, “the Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH) has staged a convincing 35% rally since the start of December, with major constituents like Devon Energy Corporation and Diamondback Energy climbing to six-month highs.”
“The rise can be chalked up to a similarly impressive and unexpected surge in oil prices,” the article aid. “Since November, spot prices for Brent and WTI Crude oil have charted an upward trajectory of roughly 25% that has now put the commodities at levels they haven’t seen since March.”
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