Bullish On AMD And Nvidia? This Direxion ETF Offers 3x Leverage On Semiconductor Stocks

Direxion Daily Semiconductor Bull 3X Shares SOXL rebounded over 5% higher last Friday to close the trading session above the 200-day simple moving average (SMA).

Although the semiconductor sector has seen a steep drop since March 31, SOXL’s recent reversal could provide a solid trade for investors with a high risk-reward appetite. SOXL is a triple-leveraged fund that consists of a variety of stocks in the semiconductor sector. Advanced Micro Devices, Inc AMD makes up 7.03% of the fund, while NVIDIA Corporation NVDA is weighted at 8.81%.

Tech stocks, including chipmaker stocks, have enjoyed bullish price action recently, matching the positive movements seen in the general markets. On Friday, the S&P 500 broke through heavy resistance near $414, suggesting that the stock market could be headed higher.

Traders who are bearish on the semiconductor sector can track the Direxion Daily Semiconductor Bear 3X Shares SOXS.

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The SOXL Chart: After printing a bullish hammer candlestick pattern on Thursday, SOXL shot higher on Friday to close near the high-of-day, suggesting higher prices could come on Monday.

• The ETF, however, could also trade sideways and print an inside-bar pattern on Monday, which would lean bullish for continuation. Eventually, SOXL would have to retrace to print at least a higher low, which would confirm a new uptrend and provide a possible solid entry point for traders who aren’t already in the position.
• When SOXL eventually retraces lower, the stock may find support at the 200-day SMA. Traders can then wait for the ETF to print a possible reversal candlestick pattern, such as a doji candle or hammer candlestick pattern, above the area. If SOXL drops below that level, however, bearish traders may gain control.
• SOXL has resistance above $16 and $17.66 and support below $14.09 and $12.13.

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