Get started
Direxion Daily Semiconductor Bull 3x SharesDirexion Daily Semiconductor Bull 3x SharesDirexion Daily Semiconductor Bull 3x Shares

Direxion Daily Semiconductor Bull 3x Shares

No trades
See on Supercharts
Overview Analysis Holdings News
Ideas
Discussions Technicals Seasonals Options

SOXL trade ideas

A scaled entry plan for SOXLOne of the best long-term performers in the stock market is the semiconductor sector. With a strong likelihood that AI will change the world in the next 10-20 years and disrupt every other industry, there are big profits to be made in semiconductor companies that are heavily invested in AI research and provide the processors to power it. That said, the current price point on SOXL is pretty high, so it makes sense to look for a lower entry. With the market (and especially the Nasdaq) turning downward this week on China trade war news, I've developed a scaled entry plan for SOXL. There are four entry points: the recent highs around 198, the high-volume node at 159, and the recent lows near 131 and 90. Normally I triple my position at each level, but I doubt we'll hit the bottom two targets on the current trade war news, so I'm weighting my entries a little more toward the two upper ones. I already made my first entry this morning near 198.
AMEX:SOXLLong
by ChristopherCarrollSmith
6
Trading the range on SOXLHere's how I'm trading SOXL right now. I buy when it gets below the red channel and sell when it gets above the red channel. A breach of either of the blue trend lines would indicate a breakout from the current trading range. So I'm keeping a stop loss just below the lower blue trend line. Today I exited at 170, and my next buy order is at 152.50. I hope to see that Monday, although with trade talks coming up in mid-October, we could easily see the uptrend continue. In my opinion, semiconductors are overvalued right now. Given the weakness of their earnings, they haven't fallen as far as they should. But if we successfully sign a trade deal, they will explode to new highs regardless of their earnings. So keep an eye out for China news.
AMEX:SOXL
by ChristopherCarrollSmith
3
Chip stock volatility could afford cheap entry in OctoberA recent survey of analysts by FactSet revealed that we're in an "earnings recession" right now and that it's expected to get worse in the next quarter. Certain sectors have been particularly hard hit, namely mining and semiconductors. Earlier this year chip companies predicted earnings recovery in the back half of the year, but that's now looking like it won't happen. Chip stocks remain relatively high-priced for now compared to their lows earlier this year, but they could get more volatile in October, especially if a trade deal with China doesn't materialize. October is a volatile month in general, but there are even more reasons for volatility this year. (On the other hand, lowered expectations might be easier to beat on earnings reports, so maybe chip stock prices won't be hit too hard?) Chip stocks consistently beat the S&P 500 over the long term, because technology is sexy and Artificial Intelligence and Big Data are the future. So for the medium-term or long-term value investor, a temporary earnings recession that depresses prices of chip stocks could be great news. It affords a cheap entry into an extremely profitable sector. Although SOXL is a leveraged instrument that's only supposed to be held for the short term, I like to buy and hold it for longer periods of time. Had I entered when SOXL was around $80 earlier this year, I could have made over 100% in just a few months. Watch the fluctuations and look for oversold levels in SOXL on the hourly, daily, and weekly charts.
AMEX:SOXLLong
by ChristopherCarrollSmith
Semiconductor strength will continue, target 208SOXL attempted a breakout above its channel and above April's highs, but got rejected and dropped back down to support at the 50-hour moving average. Here it's showing renewed strength, with volume turning green and candlesticks looking bullish. I think it will make another run at 202, this time pushing through to previous highs around 208. SOXL has strong upward catalysts in the form of strong earnings and guidance this quarter. MU got an earnings beat earlier this quarter, and its recent ascending triangle break suggests it may rise to 51.50, for $4 per share upside. (However, MU is 5% overvalued compared to its average analyst price target of $45 per share.) We've just had earnings beats from Taiwan Semiconductor, Texas Instruments, and Intel that imply the sector is recovering in the second half of the year. TSM has 17.5% upside to the average analyst price target! Intel-- SOXL's largest holding-- can still gain $2.50 per share before it reaches the average analyst price target. QCOM, another large holding, has 12.5% upside to the average analyst price target, with earnings coming up tomorrow. A beat by QCOM could trigger the run up through the 202 resistance level. As always, this is just an idea about how the market will move, not investment advice.
AMEX:SOXLLong
by ChristopherCarrollSmith
1