27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
The Direxion Daily S&P Oil & Gas Exp & Prod Bear 2X Shares (NYSE:DRIP) was surging Monday after the Group of Seven (G7) nations and the European Union agreed to put a price cap of $60-per-barrel on Russian crude oil.
The news could have been bullish for North America-based oil and gas producers, but the sector is cyclical. After enjoying a long-term bull run that began in October 2020, many leaders in the market appear to have reached their peak.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Demand may also be waning globally, and although China has reportedly lifted some COVID restrictions, continued lockdowns are hampering travel.
DRIP is a double-leveraged fund designed to outperform the inverse movement of companies held in the S&P Oil & Gas Exploration & Production Select Industry Index.
A few of the most popular companies held in the ETF are Exxon Mobil Corp (NYSE:XOM), which is weighted at 1.26% within the ETF; Occidental Petroleum Corporation (NYSE OXY), weighted at 1.15%; and Marathon Oil Corporation (NYSE:MRO), weighted at 1.25%.
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 (NYSE:GUSH).
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The DRIP Chart: DRIP reversed into an uptrend on Nov. 16 and has since made a consistent series of higher highs and higher lows. DRIP’s most recent higher low was formed on Dec. 1 at $11.45 and the most recent confirmed higher high was printed at the $12.43 mark the day prior.
- The inverse ETF has also formed a rounded bottom pattern, which could eventually turn into a cup-and-handle pattern on the daily chart. Bullish traders looking to take a position can watch to see if DRIP eventually retraces into a short downtrend before reaching the left tip of the cup, which was formed on Oct. 11 at $15.77.
- DRIP regained the 50-day simple moving average (SMA) on Monday, which indicates longer-term sentiment has turned bullish. If the ETF closes the trading day near its high-of-day price, DRIP will print a bullish engulfing candlestick, which could indicate continuation to the upside is in the cards.
- The move higher was made on higher-than-average volume, which indicates there’s an increased level of interest in the ETF. As of Monday afternoon, DRIP’s volume was measuring in at about 6.6 million compared to the 10-day average of just over 5 million.
- DRIP has resistance above at $14.74 and $16.49 and support below at $13.42 and $11.93.
Photo via Shutterstock.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.