Leveraged energy ETF hits resistance at 50-day moving average, gets high confidence bearish signal
Oil prices have been climbing over the last few weeks as tensions between the United States and Iran have created concerns about possible disruptions in the market. Since hitting a low of $50.72 a barrel on June 12, West Texas Crude jumped to a high of $58.22 on June 24. The rally in oil prices has caused a number of energy related ETFs to jump as well.
The Direxion Daily Energy Bull 3X Shares (NYSE: ERX) has rallied from the $15.50 level to a high of $20.11 on June 21. The rally has brought the ERX up to possible resistance at its 50-day moving average. As you can see on the daily chart below, the trend line acted as support on pullbacks in February and March and it could now act as resistance.
In addition to the possible resistance, the daily stochastic readings are extremely overbought and they made a bearish crossover on June 24. The indicators reached their highest level since February.
The Tickeron Trend Prediction Engine generated a bearish signal on the ERX on June 20 and that signal had one of the highest confidence readings I have seen at 90%. The signal calls for a drop of at least 4% over the next month. In addition to the extremely high confidence level, 100% of past predictions on the ERX have been successful.
ERX in -2.66% downward trend, sliding for three consecutive days on July 01, 2026
Moving lower for three straight days is viewed as a bearish sign. Keep an eye on this stock for future declines. Considering data from situations where ERX declined for three days, in of 264 cases, the price declined further within the following month. The odds of a continued downward trend are .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Stochastic Oscillator entered the overbought zone. Expect a price pull-back in the foreseeable future.
ERX moved below its 50-day moving average on June 05, 2026 date and that indicates a change from an upward trend to a downward trend.
ERX broke above its upper Bollinger Band on July 08, 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.
The Aroon Indicator for ERX entered a downward trend on July 09, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where ERX's RSI Indicator exited the oversold zone, of 22 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on July 07, 2026. You may want to consider a long position or call options on ERX as a result. In of 94 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for ERX just turned positive on July 07, 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 .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where ERX advanced for three days, in of 380 cases, the price rose further within the following month. The odds of a continued upward trend are .
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