Semiconductor Triple Index in 7-Month Uptrend

Yesterday, we looked at a Keltner Channel chart of iShares U.S. Financials ETF, and noted that it was on a pullback from being overbought.

Today’s Chart of the Day is for Direxion Daily Semiconductor Bull 3x Shares (NYSE: SOXL).

SOXL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the PHLX Semiconductor Sector Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments, such as swap agreements, and securities of the index, ETFs that track the index and other financial instruments that provide daily leveraged exposure to the index or ETFs that track the index.

Now, the Daily Price Chart below shows that SOXL has been making a series of 52-Week Highs since May.

Direxion Daily

Stocks only reach the 52-week high 52-Week High marker if they’re in the middle of a powerful rally.

And since stocks in a price uptrend, as we know, do not advance in a straight line, their price retracements provide an excellent opportunity for us.

SOXL experienced periodic price pullbacks during its strong advance since January.

Traders can use those to get in at a lower risk entry point after a 3 to 5% price retracement as the stock normally resumes its price uptrend after such retracements.

Maximizing Our Profit Potential

On July 8th, SOXL shares had a price pullback. If you had purchased SOXL shares on that date, you currently would be up 80.06% on the stock.

A fantastic return for holding a stock for only 5 months, right?

But if you had purchased the correct option contract on July 8th, you would be up 289.40% right now.

If you don’t think you’re ready to trade options big time, I’ve built out a whole course just for you…

We’ll keep following SOXL’s movements as it climbs higher, and waiting for the perfect price retracement.

Best Regards,

Chuck Hughes
Editor, Chart Of The Day

Chuck Hughes

Written By Chuck Hughes

Before Chuck Hughes won 10 Trading Championships, he was an accomplished Air Force pilot. In fact, he credits his success as a stock and options trader to his disciplined upbringing and career. When he was deciding between a career in the Navy and a career in the Air Force, the Navy told him he’d only have a 33% chance of flying jets. The Air Force gave him 100%. He liked those odds better. 35 years ago, Chuck had a wife, a young daughter, a son on the way, and a huge mortgage to afford. He didn’t want to give up on his lifelong dream and stop flying for a major commercial airline. He knew he needed to supplement his income during the 15 days a month he wasn’t flying. So he used his experience in discipline and math, and his understanding of finance and the stock markets (which he’d always been interested in,) and opened a $4,600 trading account. He made over $460,000 in profits his first two years of trading, and he hasn’t looked back since. When he was diagnosed with Meniere’s disease 15 years later, which commonly leads to vertigo…He knew his career as a pilot wouldn’t last much longer with those odds. But he didn’t have to scurry to find another gig, or panic about how his family would eat… He’d spent the last 15 years perfecting his system and raking in cash. As an options trader, Chuck does not let his emotions get in the way of his trading strategy. He adheres to disciplined and methodical options and stock trades. Because he respects the options game so highly, and understands the true freedom that financial solvency can bring, Chuck was able to design and refine his system and win those 10 Trading Championships. Put simply, Chuck Hughes’ trading strategies work, and in all types of market conditions. They’ve worked throughout the bull, bear, and flat markets America has seen in the last 30 years. Chuck Hughes has spent that time building a reputation as one of the most trustworthy options traders in the industry. His publishing group Legacy Publishing LLC was one of the few trading groups on the planet to have correctly predicted and profited from the 2008 financial crash .As a published author 16 times over, a 10-time Trading Championship winner, and an options-trading teacher for 25 years, he’s learned to trade and teach without an ego.