Bullish On NVDA, AMD? This 3x Leveraged Fund Offers Exposure And Is Setting Up A Bull Flag Pattern

Direxion Daily Semiconductor Bull 3X Shares SOXL was retracing almost 4% Wednesday on lower-than-average volume, which may confirm the ETF’s possible bull flag pattern remains intact.

The semiconductor sector has been experiencing a bull cycle, with NVIDIA Corporation NVDA making a series of new all-time highs amid increased interest in the company’s grasp on artificial intelligence.

SOXL is a triple-leveraged fund that consists of a variety of stocks in the semiconductor sector. Advanced Micro Devices, Inc AMD makes up 7.23% of the fund, while Nvidia is weighted at 8.39%.

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Tech stocks, including chipmaker stocks, have also enjoyed bullish price action recently, matching the positive movements seen in the general markets.

On Wednesday, the S&P 500 looked to be printing a bearish kicker candlestick, however, signaling the local top may be in. An eventual rebound on the index and individual stocks could provide a solid entry for bullish traders and if the move takes place, SOXL offers 3X leverage.

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

It should be noted that Direxion’s leveraged funds are designed for short-term traders and shouldn’t be held for a long period of time.

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The SOXL Chart: SOXL’s possible bull flag pattern was created between Aug. 25 and Wednesday, with the upward-sloping pole formed over the first six trading days of that timeframe and the flag forming since. If SOXL breaks up from the flag on higher-than-average volume, the measured move is about 26%, which suggests the ETF could rise toward the $29 level.

• SOXL is also trading in an uptrend, making a series of higher highs and higher lows. The ETF’s most recent higher high was formed on Sept. 1 at $24.51 and the most recent confirmed higher low was printed at the $19.40 mark on Aug. 25.
• If SOXL closes Wednesday’s trading session above the eight-day exponential moving average, the ETF will form a bullish reversal candlestick, which could indicate the next higher low has occurred and the ETF will rise on Thursday.
• If the ETF falls under the eight-day EMA, the bull flag will be negated and downward pressure could accelerate.
• SOXL has resistance above at $25.60 and at $28.62 and support below at $22.12 and at $17.66.