Direxion’s Clean Energy ETF Could Rally Higher Due to Global Demand
There is a huge demand for clean energy in various parts of the world, and that would affect the performances of some stocks in the market. The performances of the stocks would ultimately affect how some exchange-traded funds (ETFs) perform in the short and medium term.
Demand for Renewable Energy Continues to Grow
The global demand for clean energy has been increasing in recent years, thanks to the desire to reverse the effects of global warming. World leaders are working hard to ensure that carbon emission is reduced and the world uses cleaner energy sources.
Despite the desire to use renewable energy, the amount of power currently generated by renewables is still not enough to meet the rising demand for this type of energy. CNBC pointed out that “The total amount of renewable energy that’s available is growing. That’s good news for a world threatened by potentially devastating climate change. But the increase in renewable energy is still lower than the increase in global energy demand overall. A ‘transition’ from fossil fuels may come someday, but for now, renewable energy isn’t even keeping pace with rising energy demand — so fossil fuel demand is still growing.”
Investors and traders can take advantage of the rising demand for renewable energy to capitalize on with leveraged exchange-traded funds. The Direxion Daily Global Clean Energy Bull 2X Shares (KLNE) is one of the leading clean energy ETFs, and its price could rally higher over the coming months.
KLNE Rallied by 4% in Three Months
KLNE is a leveraged ETF that seeks to return 200% of its benchmark index, the S&P Global Clean Energy Index, per day. The S&P Global Clean Energy Index exposes investors to developed market countries where economic fortunes are within the clean energy business. The index captures companies that are involved in the production of clean energy or those that provide clean energy technology and equipment.
KLNE is one of the leading global clean energy ETFs currently available. Its MACD line is above the neutral zone, while an RSI of 52 shows that the fund is heading into the overbought territory. The technical indicators show that KLNE is currently performing excellently.
Over the past three months, KLNE has added more than 4% to its value, outperforming some funds in this space. At press time, the ETF is trading at $26.76 and could rally higher over the coming weeks and months.