The first month of 2026 is already in the books. Which sector walked away with the top spot when it came to total returns? Per MarketWatch, it was the energy sector (through January 29). That could give traders an opportunity for exposure to the Direxion Daily Energy Bull 3X Shares (ERX) and the Direxion Daily Energy Bear 2X Shares (ERY).
If more upside is ahead, traders can use ERX to triple their exposure to sector strength. Meanwhile, ERY allows for profitable opportunities in any pullbacks. Heading into the new year, markets wondered if the interest around artificial intelligence (AI) would persist. Apparently, it’s manifesting itself in energy stocks; the need for electricity should rise as the buildout of AI infrastructure continues.
“This is a whole different dynamic,” said Morningstar Senior Equities Analyst Travis Miller succinctly. He noted that AI data centers are helping to push demand higher for electricity. This could compound further as AI usage becomes more prevalent in personal and business use.
Those looking for more targeted exposure may want to look at the Direxion Daily Energy Top 5 Bull 2X ETF (TEXU). The fund provides 200% of the performance of the S&P 500 Energy (Sector) Top 5 Equal Capped Index. That index gives traders exposure to the top five companies representing the energy sector, with 20% weighting for each. TEXU is the perfect balance between sector and single-stock exposure.
Materials, industrials, consumer staples, and communications rounded out the top five sectors. Traders looking to 3x a sector opportunity in industrials should look at the Direxion Daily Industrials Bull 3X Shares (DUSL).
For the Contrarians
Traders looking for fallen sectors that could see a bounceback in February will most likely look at the bottom three — information technology, healthcare, and financials. If they have high conviction that a February bounce is forthcoming, traders may want to consider using the Direxion Daily Technology Bull 3X ETF (TECL), Direxion Daily Healthcare Bull 3X ETF (CURE) or Direxion Daily Financial Bull 3X ETF (FAS) for 3x opportunities.
If weakness persists, there’s always the Direxion Daily Technology Bear 3X Shares (TECS) and the Direxion Daily Financial Bear 3X ETF (FAZ). Traders can use those for bearish opportunities. Having the flexibility of leveraged and inverse ETFs leaves the door open to traders for profitable opportunities, regardless if a specific sector trends higher or lower.
Click here to view Direxion’s full suite of leverage-inverse ETFs.
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