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Leveraged Crude Oil ETF (UCO) Scales a New 52-Week High

Zacks Equity Research
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Investors seeking momentum may have ProShares Ultra Bloomberg Crude Oil UCO on radar now. The fund recently hit a new 52-week high. Shares of UCO are up approximately 147.8% from its 52-week low of $12.36/share.

But could there be more gains ahead for this ETF? Let’s take a look at the fund and the near-term outlook to get a better idea of where it might be headed.

UCO in Focus

UCO focuses on providing 2 x exposure to the price movement of WTI Crude oil, the most popular benchmark for crude oil. This fund invests in listed crude oil futures contracts. UCO charges 95 basis points in fee per year and has AUM of $424.2 million (see all Energy ETFs here).

Why the Move?

WTI crude prices rose to reach a more than three-year high. Increased geopolitical tensions coupled with lower inventories led to the steep increase. U.S. commercial crude inventories dropped by 1.1 million barrels in the week through Apr 13, per a report by the Energy Information Administration (EIA). Moreover, increased geopolitical risks involving a missile attack on Syria’s chemical plants by the Trump administration and its allies and the ongoing tension between Saudi Arabia and Yemen have been contributing to crude’s rally.

More Gains Ahead?

Zacks does not rank inverse and leveraged ETFs in view of their short term performance objectives. However, UCO has a weighted alpha of 90.68.  So, there is a promising outlook for those who want to ride this surging ETF a shade further.

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PRO-ULT BB CRUD (UCO): ETF Research Reports
 
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