Direxion Daily Semiconductor Bull 3X Shares SOXL soared over 7% on Thursday, aiming to reach new highs and confirm its upward trend.
The Semiconductor Surge
In the midst of a bull cycle, the semiconductor sector is abuzz with activity, with NVIDIA Corporation NVDA soaring to new heights on the back of stellar quarterly earnings results, continuously setting fresh all-time highs. Advanced Micro Devices, Inc. AMD is also on an upward trajectory, riding high on positive sentiment within the industry.
Exploring SOXL
SOXL is a triple-leveraged fund comprising various semiconductor stocks. AMD makes up 8.67% of the fund, while Nvidia holds a 7.54% weightage.
Thursday saw the S&P 500 showing signs of breaking out from a bull flag pattern, hinting at a potential new all-time high as the Federal Reserve’s favored inflation measure met expectations. Tech stocks, including chipmakers, mirrored the general market’s bullish trend.
Direxion’s Perspective
Traders anticipating a semiconductor sector dip or bearish on the industry can monitor the Direxion Daily Semiconductor Bear 3X Shares SOXS.
Notably, Direxion’s leveraged funds are tailored for short-term trading and are not suitable for long-term holds.
Chart Analysis
The SOXL Chart: Since October 31, SOXL has maintained a consistent upward trend, forming a bullish double-bottom pattern at $14.09. The uptrend has been within a rising channel since December 14, signaling positivity until a breakdown occurs from the lower trend line.
- Despite making higher highs and higher lows, SOXL’s relative strength index (RSI) has been showing lower lows, leading to bearish divergence and a loss of momentum.
- Bulls seek a close above the February 23 high of $42.68 to confirm the uptrend, while bears watch for a close below this level, potentially signaling a retracement.
- Resistance lies ahead at $44.97 and the crucial $50 mark, with support at $41.60 and $39.53.