Energy ETF (ERX) Flashes Possible Bullish Sign
The dramatic fall in oil prices over the last few weeks has garnered a lot of attention from the financial media. Oil prices dropped for 12 straight days which marked a record losing streak.
There were numerous factors behind the decline—supply and demand imbalances, political pressure, and production level disagreements are just a few.
Regardless of how things play out in the long run, there is a short-term pattern on the chart of the Direxion Daily Energy Bull 3X Shares (NYSE: ERX) that suggests a bounce may be in the works.
The fund dipped down to the $22 level on Thursday and then moved higher later that day and on Friday as well. The $22 area served as a low on October 29 and seeing these two low points in close proximity indicates a possible double-bottom pattern.
For the pattern to be confirmed, the fund would need to move above the high in between the two lows. In this case the high came at $29.05 on November 8. If the ERX does bounce back above the previous high, it would mean a 15.6% gain from the close on Friday.
One thing to keep in mind with the ERX is that it is a triple-leveraged ETF and that leverage works in both directions. If the energy sector moves up 1%, the ERX should move up 3%. If the energy sector moves down 1%, the ERX should move down by 3%. At least that is how the fund is designed to work.
Something I have noticed about the ERX is that the 3-to-1 leverage doesn’t hold up as well over the long run as it does on a day to day basis. The 3-to-1 relationship holds up much better over the short term. If you are going to invest in the ERX, you should be aware of this relationship.
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Harry Richardson — Algorithmic Trader & Strategy Developer Harry is an algorithmic trader specializing in impulse and breakout trading strategies across cryptocurrency and equity markets. With more than 10 years of experience in developing automated trading systems, he focuses on building structured algorithms designed to capture momentum while maintaining strict risk control. His approach combines quantitative analysis, real-market execution, and continuous performance monitoring. Vitalii prioritizes risk management, drawdown control, and strategy stability over short-term optimization, ensuring algorithms are adaptable to changing market conditions. He has developed and tested hundreds of automated strategies, working extensively with live trading environments, forward testing, and portfolio-level algorithm management. His work centers on transforming trading ideas into fully operational, scalable automated systems.
Momentum Indicator for ERX turns positive, indicating new upward trend
ERX saw its Momentum Indicator move above the 0 level on August 10, 2026. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 93 similar instances where the indicator turned positive. In of the 93 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for ERX just turned positive on August 11, 2026. Looking at past instances where ERX's MACD turned positive, the stock continued to rise in of 50 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for ERX crossed bullishly above the 50-day moving average on July 21, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In of 22 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ERX advanced for three days, in of 381 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 302 cases where ERX Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The RSI Indicator demonstrates that the ticker has stayed in the overbought zone for 5 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where ERX declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
ERX broke above its upper Bollinger Band on August 11, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
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