Direxion Daily Semiconductor Bull 3X Shares SOXL was trading slightly higher Monday, ahead of Advanced Micro Devices, Inc AMD quarterly earnings print, which will be released Tuesday after the market closes.
The semiconductor sector has been experiencing a bull cycle, with NVIDIA Corporation NVDA making a series of new all-time highs amid an increased interest in companies related to artificial intelligence.
SOXL is a triple-leveraged fund that consists of a variety of stocks in the semiconductor sector. Advanced Micro Devices makes up 7.23% of the fund, while Nvidia is weighted at 8.4%.
Tech stocks, including chipmaker stocks, have also enjoyed bullish price action recently, matching the positive movements seen in the general markets.
On Monday, the S&P 500 looked to be printing a bearish reversal candlestick, however, signaling the local top may be in. An eventual retracement 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 was attempting to break up through heavy resistance just under the $29 mark on Monday after rejecting the area multiple times between July 17 and Friday. The ETF was working to print a doji candlestick, which could indicate the local top has occurred and SOXL will retrace on Tuesday.
- On July 20, SOXL reversed into an uptrend and has since made a higher low at $24.21 on July 26 and since then, the ETF has printed a series of higher highs. If SOXL falls later this week, bullish traders want to see the ETF form a bullish reversal candlestick above $25 to indicate the trend will continue.
- Bearish traders want to see SOXL’s potential double top pattern play out, which could drop the ETF into at least a short-term downtrend.
- SOXL has resistance above at $28.62 and at $33.10 and support below at $25.60 and at $22.12.
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