Retail Data Boosts Amazon and Direxion ETFs
Amazon.com Inc AMZN emerges as a standout performer amidst Thursday’s market activity, with AMZN stock enjoying significant gains following robust consumer spending data. Retail sales surged 1% month-over-month in July, surpassing economists’ projections of a 0.3% increase.
Furthermore, on a year-over-year basis, retail sales surged by 2.7%, a favorable contrast to the downwardly revised 2% figure reported in June. In addition, jobless claims hit a five-week low, coming in at 227,000 for the week ending Aug. 9, compared to the anticipated 235,000, allaying concerns over labor market weakening.
This positive turn is a welcomed deviation from the repercussions of Amazon’s mixed second-quarter earnings report, which resulted in a decline in AMZN stock value post-release. Despite missing net sales consensus and issuing soft guidance for the upcoming quarter, the recent surge in retail sales seems to have injected optimism back into the market.
However, while the recent encouraging data is promising, it may not entirely alter the broader economic narrative. Inflation concerns earlier in the year led to challenges such as rising household debt, creating a mix of bullish and bearish sentiments towards AMZN stock.
Direxion’s Amazon-Focused ETFs
For investors looking to capitalize on Amazon’s varying performance, Direxion provides two enticing ETFs centered around AMZN stock. First, catering to the optimists, the Direxion Daily AMZN Bull 2X Shares AMZU aims to double the daily return of AMZN through a 2X leveraged fund.
On the flip side, for investors with a bearish outlook, the Direxion Daily AMZN Bear 1X Shares AMZD provides the inverse daily return of AMZN stock.
It’s worth noting that both AMZU and AMZD are designed for short-term plays and should not be held for periods exceeding a day to avoid potential value erosion due to daily compounding effects.
AMZU ETF Analysis
AMZU experienced a sharp upward trajectory following Amazon’s lackluster Q2 performance. The recent positive retail sales report propelled the ETF, breaking above its 20-day exponential moving average and aiming for the 200-day moving average with a notable support level at $32.
- The bulls have their sights set on the 200-day moving average at $31.06 as the next target.
- Historically, the $32 support line has been crucial throughout the year.
AMZD ETF Analysis
In contrast, the bearish AMZD ETF struggled prior to Amazon’s Q2 disclosure. However, following the positive retail sales report, bearish investors are attempting to stabilize the ETF’s performance.
- Notably, the fund dipped below both its 200-day moving average ($15.35) and its 20-day exponential moving average ($14.90).
- Pessimists are closely monitoring the 50-day moving average at $14.18, as a breach below this critical level could trigger further downside movement.