Tag Archives: nasdaq

7 Ways To Short Crude Oil Now

Crude oil has had a wild ride this year. It seemed every day in January, oil was making new lows before it bottomed in early February at $26.05.The last five weeks have been the opposite, with almost every day a green day for the black gold. Crude oil futures looked to have finally topped out at $42.49 earlier this week, before pulling back under $40.00 yesterday. Now it looks like shorts sellers of crude and oil related companies have a solid entry where they can start short positions. Both the commodity and oil stocks look to trend lower into earnings season and risk can be realized with stops at the highs of the year. Oil is due for a sell off and it wouldn’t be a big surprise if we saw a pullback to the $34-35 area sometime soon. While the pullback starts to form, investors can profit from a fall in oil by buying the ETFs below. In late January, I had a bullish view in oil that can be found here . In the write up, I suggested getting long various oil bull ETFs and a few oil stocks. If that advice was followed I would suggest taking profits, then waiting for another chance to get back in at lower prices. ETF/ETNs to short Crude oil VelocityShares 3x Inverse Crude Oil ETN (NYSEARCA: DWTI ) – This ETN is an investment that seeks to replicate, net of expenses, three times the opposite (inverse) of the S&P GSCI Crude Oil Index ER. The index comprises futures contracts on a single commodity and is calculated according to the methodology of the S&P GSCI Index. DWTI is a very volatile product that allows bearish oil investors to maximize their gain. If oil falls 5% in a day, this ETN will rise 15%, maximizing the bearish bet that is made. DWTI will pull back fast when oil heads higher, so I only encourage short-term trading with this instrument. ProShares UltraShort Bloomberg Crude Oil ETF (NYSEARCA: SCO ) – This investment seeks to provide daily trading results that correspond to twice (200%) the inverse of the daily performance of the Bloomberg WTI Crude Oil SubindexSM. The “UltraShort” Funds seek daily results that match (before fees and expenses) two times the inverse (-2x) of the daily performance of a benchmark. Very much like DWTI, this will move higher as crude oil moves lower. If oil is at $40 a barrel and falls to $39, we would see a 5% move higher in SCO reflecting the 2.5% move in crude lower. The main difference between SCO and DWTI is what magnitude, higher or lower, a trader is looking for. ETFs to short oil and gas companies Direxion Daily Energy Bear 3X Shares ETF (NYSEARCA: ERY ) – This ETF is an investment that seeks daily trading results, before fees and expenses, of 300% of the inverse of the performance of the Energy Select Sector Index. The fund creates short positions by investing at least 80% of its assets in swap agreements, futures contracts, options, reverse repurchase agreements, ETFs, and other financial instruments that, in combination, provide inverse leveraged and unleveraged exposure to the index. ERY is the same concept as DWTI, except the shorting aspect looks to focus on actual energy companies rather than crude oil futures. This might benefit a trader if he wants to go short a basket of energy stocks right before earnings season. The trader might be thinking that because of low oil prices, these energy companies will report negative earnings, leading to lower stock prices. This event would push ERY higher even if crude oil futures remained flat. ProShares UltraShort Oil & Gas ETF (NYSEARCA: DUG ) – The investment seeks daily investment results, before fees and expenses, that correspond to twice the inverse (-2x) of the daily performance of the Dow Jones U.S. Oil & GasSM Index. The index measures the performance of the oil and gas sector of the U.S. equity market. DUG will move in a similar manner to ERY, but a down move will only reflect twice the performance instead of three times. ProShares Short Oil & Gas ETF (NYSEARCA: DDG ) – This investment seeks daily trading results that correspond to the inverse (-1x) of the daily performance of the Dow Jones U.S. Oil & GasSM Index. The investment seeks daily investment results that correspond to the inverse (-1x) of the daily performance of the Dow Jones U.S. Oil & GasSM Index. DDG will move in a similar manner, but a down move will reflect the actual move instead of the leveraged gains that DUG and ERY have. A trader will utilize the above-mentioned instruments to short oil and gas stocks. They all offer different forms of risk and can be chosen depending on the trader’s willingness to accept risk. Other ETF/ETNs that will benefit Direxion Daily Nat Gas Rltd Bear 3X Shares ETF (NYSEARCA: GASX ) – This ETF seeks daily investment results, net of expenses, of 300% of the inverse of the performance of the ISE-REVERE Natural Gas IndexTM. Energy prices are typically correlated and move together. A move lower in oil will put pressure on natural gas prices, sending this ETF higher. iPath S&P 500 VIX ST Futures ETN (NYSEARCA: VXX ) – This ETN is a sympathy and fear play if oil prices were to return to the low $30s. This kind of event would create fear, bringing a bid back to the VIX. This ETN will head higher whenever the VIX and VIX futures head higher. Original Post

Tap Water With These Stocks And ETFs

Water plays a major role in the evolution of the economy and, of course, human life. Though water accounts for three-fourths of the total earth surface, fresh water accounts for a meager 3% of the total. As a result, about 650 million people across the globe do not have access to fresh drinking water putting them at risk of infectious diseases and premature death, according to United Nations’ estimates . This is primarily thanks to limited supply, an ever-expanding population, poor sanitation, and growing demand for consumption. Notably, about 70% of the total demand comes from irrigation whereas demand from industrial applications and domestic households account for about 22% and 8%, respectively. Given the scarcity of drinking water, companies and governments are coming up with new ways to recycle, manage, and desalinate water resources. Utility operators have already started to invest in their aging infrastructure and President Barack Obama is seeking an 18% increase in federal spending next year for safe drinking water. As per the Environmental Protection Agency (EPA), U.S. water infrastructure needs more than $384 billion over the next two decades to ensure safe drinking water to Americans. Further, about $271 billion is needed to upgrade the treatment of plants’ storage tanks and water distribution systems over the next five years. Given this, water could be an important growth industry and an excellent investing area as utility operators start putting their money into this corner to meet growing global demand for fresh water. Further, our Zacks Industry Rank confirms the upside to this industry as water utility has a solid rank in the top 9% at the time of writing. And investors’ thirst could easily be quenched by tapping this growing opportunity with our chosen stocks and ETFs. Stocks in Focus We have used our Zacks stock screener to find out the best stocks in this space. The parameters include Zacks Rank #1 (Strong Buy) or #2 (Buy), positive current-year earnings estimate revisions over the past 30 days and positive current-year EPS growth. Connecticut Water Service, Inc. (NASDAQ: CTWS ) This Connecticut-based company is a regulated water operator providing water service to people throughout towns in Connecticut and Massachusetts. The company has seen estimates rising by a couple of cents over the past 30 days for this year with an expected earnings growth rate of 2.78%. The stock has a Zacks Rank #2 with a solid Momentum Style Score of A and is up 13.3% so far this year. Middlesex Water Co. (NASDAQ: MSEX ) This New Jersey-based company provides quality water and wastewater service to residents in parts of New Jersey and Delaware, and beyond. It has seen solid earnings estimate revision of four cents over the past 30 days for this year to $1.30, representing substantial growth of 6.56% year over year. The stock has a Zacks Rank #2 with a solid Momentum Style Score of A and Growth Style Score of B. MSEX has gained 15.3% in the year-to-date timeframe. The York Water Company (NASDAQ: YORW ) This Pennsylvania-based company impounds, purifies and distributes drinking water. The Zacks Consensus Estimate for 2016 has been revised up from $0.99 to $1.00 over the past 30 days reflecting year-over-year growth of 3.61%. The stock has a Zacks Rank #2 with a Momentum Style Score of B. It has returned 20.1% so far this year. ETFs in Focus While there are four water ETFs available in the market, we have highlighted three funds that are in the green in the year-to-date timeframe. PowerShares Water Resources Portfolio (NYSEARCA: PHO ) This fund provides exposure to the U.S. water utility stocks that create products to conserve and purify water for homes, businesses and industries. It tracks the Nasdaq OMX US Water index and holds 32 securities in the basket with nearly double-digit allocation to the top firm. Other firms hold less than 7.8% share. The fund has amassed $642.8 million in AUM and is considered liquid when compared to the other choices in the space. It charges investors 61 basis points a year in fees and has added 0.4% in the year-to-date timeframe. Guggenheim S&P Global Water Fund (NYSEARCA: CGW ) This ETF provides global exposure by tracking the S&P Global Water Index. It holds 53 stocks in its basket with the largest allocation of over 7% to the top two firms while other firms hold less than 5.6% share. The fund has managed assets of nearly $358.1 million and trades in volume of 52,000 shares per day on average. It charges 64 bps in fees and expenses from investors. In terms of country exposure, American stocks make up for nearly 39% of assets closely followed by United Kingdom with nearly 17.6% share. CGW is up 2.5% so far this year. First Trust ISE Water ETF (NYSEARCA: FIW ) This ETF follows the ISE Water Index, which is a benchmark of firms that derive a substantial portion of their revenues from the potable and wastewater industries. Holding 35 stocks, it is pretty well spread out across components with each holding not more than 5.10% of assets. The fund has amassed $105.1 million in its asset base while charging investors 59 bps in annual fees. Volume is light at nearly 13,000 shares a day on average. The fund has delivered impressive returns of over 9% in the year-to-date timeframe. Original Post