GUSH, provides 3x daily exposure to an equal-weighted index of the largest oil and gas exploration and production companies in the US. These leverage funds are designed to move three times the daily change in the underlying index. The EFT has taken a significant beating and poses significant investment risk. The coronavirus and Saudi “price war” have been a perfect storm to drive oil related stocks down. Even as crude oil prices recover it may not be enough for this fund to recover to previous levels.
The So What?: The projected global demand for oil after COVID-19 assumptions is approximately -9.4%. With some key areas impacted being road fuel down -9.4% and Jet fuel down -31%. The total oil demand in North America for 2020 is forecasted to fall by 2.3 million bpd to 22.6 million bpd, a 9.2% decline from 2019’s 24.9 million bpd. April will see a decline of 30%, with demand falling from 24.6 million bpd to 17.2 million bpd. May will see a decline of 21.5%, with demand falling from 24.6 million bpd to 19.3 million bpd. However, as social distancing guidelines are loosened oil demand volumes are expected to increase gradually in June, July, and August. Ultimately, oil demand levels return to the previous year’s levels by December. GUSH has lost -94% of its value in the past three months as the COVID pandemic and oil price war has taken its toll. But the dependency the world has on fossil fuels has not changed. As the world returns to some form of normalcy, the demand for oil and gas will increase in stride. I anticipate this ETF will gain approximately 1000% in value by 2020 years end.
The Why?: Trading volumes for GUSH are occurring at very high levels, showing signs of a stabilized floor established and the current price is positioned in a bullish zone. The potential to seize significant investment gains of +1000%, significantly outweighing any potential risk for me to make on this investment. I am not a financial advisor. The advice here given is not financial advice even though my excitement might make it look like such. Trade at your own risk and remember nobody can guarantee you results. I conduct analysis and make informed decisions on what I believe is right and at the end of the day, I am just a person, not an expert. Again, this is my belief, a belief of an ordinary man, who just works hard and enjoys the pleasures of swing trading personally.
I recently bought shares of GUSH. Just by looking at the trend before the virus hit, I thought it would be stupid not to buy. Hoping to it would get back to what it was selling per share, pre coronavirus.
@mykonchince Love the analysis and I've been looking at gush for some time now. My only concern is that as a leveraged etf, there are fees and potential for etf decay. Even though the long term for the next coming months may be bullish, is there potential for fees outweighing gains even on a free trading platform such as robinhood? I understand it is a 2x leverage but that is a "daily" 2x leverage meaning there is no guarantee of it being 2x over the long term. Also the etfs creator Direxion advertises the etf as a short term etf. What are you thoughts on this ?
Cryptillionaire
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What effect does the 1:40 split on 3/24/2020 have on your prediction?
edwardalonzo65
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I was a little scare on how low it has gone down to , but thanks to your observation and report . I got some of the confidence back and I’m going to hold on my shares . Bought my shares at an average of 36.70 so far been stable on a bearish level.
mykonchince
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@edwardalonzo65 I’m bullish on this ETF and planning to hold my positions for at least the next 6 months.
Wondering what y’all think about GUSH.