SOXL ETF Reaches New Heights SOXL hit a 25-month peak from March 1 to March 8, confirming Benzinga’s prior forecast on Feb. 29.
Following this surge, the 3X leveraged semiconductor-focused ETF began a period of consolidation, declining approximately 18% from the March 8 high of $56.99.
The recent consolidation caused SOXL’s relative strength index (RSI) to drop from around 75% to a more moderate 56%. With this decreased RSI, SOXL now has the opportunity to rise further post-consolidation. However, this potential growth is contingent on the continued upward trajectory of key holdings like Nvidia Corporation NVDA and Advanced Micro Devices, Inc AMD.
AMD carries an 8.67% weight within the SOXL ETF, while Broadcom, Inc AVGO holds an 8.59% weight. Nvidia stands as the third largest holding in the ETF, with a weight of 7.54%.
On a recent note, BofA Securities analyst Vivek Arya reiterated a Buy rating on Nvidia stock, elevating the price target from $925 to $1,100. The revised target implies a 21% upside potential, signaling Arya’s positive outlook on Nvidia’s trajectory.
Bearish traders looking to navigate a potential semiconductor sector downturn can monitor the SOXS ETF SOXS. It’s crucial to mention that Direxion’s leveraged funds are tailored for short-term trading and are not ideal for long-term investments.
Evaluation of SOXL Chart: Following declines on Monday and Wednesday, the ETF rebounded from the $45 region, a pattern also observed on March 5. This consistent bounce indicates robust support at that level, leading to the formation of a triple bottom pattern.
- With Wednesday’s attempt to create a hammer candlestick on the daily chart, there are signs that the local bottom has been reached. A move higher on Thursday would confirm the candlestick’s validity, potentially propelling the ETF past Tuesday’s daily high and overturning the recent downtrend.
- A breakthrough above Tuesday’s high would see SOXL exiting a rising channel pattern in place since Dec. 14, presenting a bullish breakout opportunity.
- Bearish traders will closely monitor a drop below the $45 mark, which could nullify the triple bottom pattern and escalate downward pressure.
- Key resistance levels above sit at $50 and $55.94, while support lies below at $44.97 and $41.60.
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