Direxion Daily S&P Oil & Gas Exp & Prod Bear 2X Shares (ARCA: DRIP) was rising about 4.5% Tuesday after data released by the Bureau of Labor Statistics showed the Consumer Price Index (CPI) eased to an annual rate of 3.1% in November, which matched expectations.
Last week, OPEC+ nations agreed on new oil cuts amid oil production in the U.S. reaching record levels and supply outpacing demand. Despite the news, the United States Oil Fund (ARCA: USO) fell to a five-month low the following day on Dec. 7, throwing the sector into a bear market.
Must Read: Crude Conundrum: US Oil Production Hits Record Levels, But Energy Stocks Aren’t Pumping
Trending: Tesla Spinning Its Wheels: Snow-Challenged Cybertruck Gets Rescued By Rival Pickup
Analysts have recently turned bearish on the sector, with Morgan Stanley analyst Devin McDermott downgrading Marathon Oil Corporation Corp (NYSE: MRO) from Overweight to Equal Weight on Monday and dropping a price target from $27 to $25. On Friday, JP Morgan analyst John Royall maintained an Overweight rating on Exxon Mobil Corp (NYSE: XOM) and lowered a price target from $134 to $127.
DRIP is an inverse double-leveraged fund designed to track companies held in the S&P Oil & Gas Exploration & Production Select Industry Index by 200%. Inverse ETFs offer a vehicle for traders to play a group of stocks bearishly, without having to open a short position.
A few of the most popular companies held in the ETF are Exxon, which is weighted at 2.54% within the ETF; Occidental Petroleum Corporation (NYSE: OXY), weighted at 1.53%; and Marathon Oil, weighted at 1.54%.
It should be noted that leveraged ETFs are meant to be used as a trading vehicle as opposed to long-term investments.
For traders looking to play the oil and gas sector bullishly, Direxion offers the Direxion Daily S&P Oil & Gas Exp & Prod Bull 2X Shares (ARCA: GUSH).
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The DRIP Chart: DRIP broke up from a bull flag on Tuesday and crossed above the 200-day simple moving average (SMA), which threw the bearish ETF into a bull cycle. The bull flag was formed between Dec. 1 and Monday and has a measured move of about 18%, which suggests the ETF could rally toward the $14.50 mark.
DRIP also confirmed a new uptrend on Monday and Tuesday, by…
Click Here to Read the Full Original Article at Cryptocurrencies Feed…
