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 upward trend: price rose above 50-day moving average on June 09, 2025
ERX moved above its 50-day moving average on June 09, 2025 date and that indicates a change from a downward trend to an upward trend. In of 49 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator suggests the stock price trend may be in a reversal from a downward trend to an upward trend. of 61 cases where ERX's Stochastic Oscillator exited the oversold zone resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The 10-day moving average for ERX crossed bullishly above the 50-day moving average on June 11, 2025. This indicates that the trend has shifted higher and could be considered a buy signal. In of 19 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 365 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 276 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 10-day RSI Indicator for ERX moved out of overbought territory on June 23, 2025. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 42 similar instances where the indicator moved out of overbought territory. In of the 42 cases, the stock moved lower in the following days. This puts the odds of a move lower at .
The Momentum Indicator moved below the 0 level on June 25, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on ERX as a result. In of 95 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for ERX turned negative on June 25, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 41 similar instances when the indicator turned negative. In of the 41 cases the stock turned lower in the days that followed. This puts the odds of success at .
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 June 10, 2025. 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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