The Semiconductor Sector Uptrend

Direxion Daily Semiconductor Bull 3X Shares SOXL was surging over 7% on Thursday, aiming to confirm its uptrend with a higher high. The sector is currently on a bullish trajectory, with NVIDIA Corporation NVDA hitting new milestones and Advanced Micro Devices, Inc AMD riding high on positive sentiment.

Market Dynamics and Expectations

The stock market, led by the S&P 500, appeared poised for record levels as the Federal Reserve’s inflation gauge met expectations. Tech companies, particularly chipmakers, have been enjoying strong market movements in sync with the broader indexes.

Leveraged ETF Action

SOXL, a triple-leveraged fund with key holdings in semiconductor giants NVIDIA and AMD, remains a popular choice for traders seeking exposure to the sector’s upward momentum. Although leveraged funds like Direxion’s products offer short-term trading opportunities, caution is advised when considering long-term holdings.

Technical Analysis and Market Outlook

SOXL’s price action has been bullish since late October, forming a strong uptrend. Despite recent bearish divergence in the relative strength index (RSI), the ETF’s uptrend remains intact. Traders are closely watching key resistance levels at $44.97 and $50, while support levels are identified at $41.60 and $39.53.

• For bullish momentum to continue, traders are eyeing a close above $42.68, confirming the uptrend. Conversely, a close below this level could signal a retracement.