NUGT weekly or monthly WHY does it flatline?

Tasuki

Please somebody pull up a chart of NUGT on a daily chart on Stockcharts. Looks pretty normal, right? Now switch to a Weekly or Monthly. Why on earth does the chart flatline? Surely it wasn't valued at 4200 in the year 2011, and then drop like a rock over the next couple of years. Pull up the same symbol on anything else besides Stockcharts, even Bigcharts (advanced charting, still free), and you'll see what certainly is the correct chart pattern for NUGT on the Weekly and Monthly charts. Why on earth does Stockcharts screw this up so badly?...and I've seen this with lots of other charts over the years. Never been able to figure out what's going on. Anybody know?
Thanks, Tasuki

markd

A 5 year daily on big charts looks pretty similar. I'm not exactly sure how leveraged shares work data-wise, but probably the fact that they are leveraged has something to do with it. You could go to the Direxion site to see if they have an explanation, or maybe try Support. But it looks to me like the data is probably correct.

Tasuki

markd, thanks for replying. Well, blow me down---if you go to Bigcharts, create a chart for NUGT and have it go out for a decade, it does indeed look like the Stockcharts chart. I'm still not believing that NUGT was ever that high, so I'm still insisting that something's fishy, but the question is what---maybe you're right and it has something to do with being leveraged? Not sure. Couldn't find anything useful on Direxion's website (but maybe I didn't know where to look). I guess this is a question for Stockcharts tech support. I've seen this problem several times before, so it's worth getting an answer. If they reply, I'll post it here.

Tasuki

Well, here's a partial answer at least:
http://stockcharts.com/docs/doku.php?id=policies:adjusted_data

The key sentence is:
" 1. Our historical price data cannot be used to determine the actual buy or sell price for a stock at some point in the past."

So, Stockcharts did make some kind of adjustment to the price, thinking that this was a good idea. Maybe it is a good idea in some circumstances, but obviously not with NUGT, as the parabolic decline makes any technical analysis impossible.
I'm still hoping they'll tell me exactly what sort of adjustment they made. Stay tuned!

markd

If you add an underscore before the symbol, it shows you unadjusted data.

I don't think leveraged funds and technical analysis are meant to go together. You would do your technical analysis on the underlying instrument, and then leverage your bet on the direction with these shares.

Here's a key sentence I found on the Direxion site (my emphasis):

"Leveraged and inverse ETFs pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They seek daily goals and should not be expected to track the underlying index over periods longer than one day. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments."

Tasuki

Thanks, Markd. The question (for me) remains, how exactly was NUGT "adjusted"? By earnings? by dividends? by something else?
Interesting observation about using the underlying instrument for technical analysis. Good insight!
Tasuki

markd

You would probably have to read the prospectus to understand that.

David_H

NUGT has been that high. Change your chart to log and you will see the data a bit better. Add EVENTS to the overlay to see the number of splits. NUGT has split 1:5, 1:10, 1:10, 5:1, 1:4; that adds up to a 1:400 split since its inception. The _NUGT symbol will show you the actual price at the time.