Convexity Daily 1.5x SPIKES Futures ETF (NYSE: SPXY) was trading about 1.5% lower on Monday bouncing up slightly from near the $5 level, which acted as support over the last three trading sessions, holding the ETF up from continuing in a downtrend pattern.

SPKY is a 1.5x leveraged fund, which tracks the SPIKES Futures Short-Term Index and measures volatility in broad-based equities in a similar way to ProShares Ultra VIX Short Term Futures ETF (NYSE: UVXY), which tracks the movement of the S&P 500 VIX Short-Term Futures Index.

For every 1% daily movement in the SPIKES Futures Short-Term Index, the SPKY fund seeks to move 1.5%, meaning that it’s for short-term trades and should not be held for a long period of time.

The Federal Reserve’s next meeting on July 25 and 26, when the central bank is largely expected to announce another 0.25% rate hike after pausing its campaign in June.

As the meeting draws nearer, volatility in the stock market could increase, which could send SPKY higher. From a technical perspective, SPKY looks set for a short-term bounce over the coming days because the ETF has entered oversold territory on the daily chart.

The SPKY Chart: SPKY’s relative strength index (RSI) is measuring in at about 27%, which indicates the ETF is currently oversold. When SPKY’s RSI fell under the 30% mark between June 15 and July 5, the ETF spiked 23% from the July 3 low of $5.41 before continuing in its downtrend.

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Edited by Saba Fatima and Maham Javaid