DIG ETF - Ultra Oil & Gas - 6/27/10

The Proshares, symbol DIG, Oil & Gas Ultra ETF is a 200% return on the Dow Jones U.S. Oil & Gas Index.  If the Dow Jones O&G index goes up 1%, the ETF goes up twice that much or 2%.

The top 10 holdings of DIG as of 6/25 is Exxon (XOM) with 26%, Chevron wiht 12%, ConocoPhillips, Schlumberger, Occidential Petroliem, Apache, EOG Resources, Devon Energy, Halliburton and Marathon Oil.

The DIG ETF ended Friday up $.07 but more importantly, the candlestick was a spinning top candelstick formation.  Spinning tops many time indicate indecsion during a day when the stock price had wide flucuations to both the up and downside.  At the end of the day, neither the bears or bulls won.  This can indicate a short term trend reversal.  Confirmation on Monday is required.  DIG has a high this week on Monday of $32.74 and a low on Friday of $27.10, a range of $5.50.  This is a 17% swing.

The intraday chart of DIG shows the steady drop of DIG through Friday.  On Friday it set to short term resistance at $27.10.  It then penetrated the 20 period moving average and set $27.50 as the new low.  It ran up the $28.25 before retreating down again.  The good news is that it did not take out the $27.50 low AND it stayed above the 20 period moving average.  The 20 period moving average also has a positive incline as well.

Politics, the Economy and Oil.

Large and independent oil companies have been under scrutiny by the US Government since the Gulf Oil spill.  All of the stocks have been beaten down with the bad press.  We are now coming into the heavier driving season with July 4th weekend coming up and the bulk of summer travel yet ahead.  The price of oil drives these oil companies and any adverse news or more regulation will potentially hurt these beaten up shares more.

A growing economy uses resources and oil is a key player.  A growing economy will also have increasing oil prices.