The semiconductor sector is riding a wave of exuberance, with Direxion Daily Semiconductor Bull 3X Shares (SOXL) surging over 7% on Thursday. The ETF is poised to mark a new high, affirming its bullish trend.
NVIDIA Corporation (NVDA) has been soaring to unprecedented heights, buoyed by a string of impressive quarterly earnings that continue to surpass expectations. Meanwhile, Advanced Micro Devices, Inc (AMD) is also on an upward trajectory, benefitting from positive sentiment within the sector.
SOXL, a triple-leveraged fund comprising various semiconductor stocks, allocates 8.67% to AMD and 7.54% to Nvidia.
The S&P 500 appeared poised to break out from a bullish flag pattern, hinting at a potential new all-time high. With the Federal Reserve’s inflation gauge meeting forecasts, tech shares, especially chipmakers, have been enjoying a bullish run, mirroring the broader market positivity.
Traders seeking to bet against semiconductors or anticipate a pullback can monitor the Direxion Daily Semiconductor Bear 3X Shares (SOXS).
Note that Direxion’s leveraged funds are geared towards short-term trades and are not ideal for prolonged holding periods.
Since October 31, SOXL has maintained a steady uptrend, forming a bullish double-bottom pattern at $14.09. The ETF’s ascent has been within a rising channel pattern since December 14, a bullish indicator unless it breaks below the lower ascending trend line.
- Despite making higher highs and higher lows, SOXL’s relative strength index (RSI) has been showing lower lows, indicating waning momentum.
- Bulls aim for a close above the February 23 high of $42.68 to confirm the uptrend, while bears seek a close below that level to signal a potential retracement.
- Resistance levels for SOXL stand at $44.97 and the psychologically significant $50, with support at $41.60 and $39.53.