Sign InSummary
The technical analysis of SOXL on July 5, 2023, indicates a decrease in stock price but with an overall upward trend, while the fundamental analysis suggests a premium for its earnings and mixed news sentiment, leading to a prediction of potential stabilization in the short term followed by an upward crawl in the upcoming weeks, classifying SOXL as a 'Hold' for investors.
Technical Analysis
SOXL closed at $23.85 on July 5, 2023, a 6.43% decrease from the previous trading day. This followed a trading range between $23.83 (its lowest price of the day) and $25.18 (its daily high). The stock has underperformed compared to its average volume over the last 100 days, which stands at 62.29 million shares. The trading volume on July 5th was 37.45 million shares.
Comparing the stock's moving averages, the 50-day moving average stands at $19.23, while the 200-day moving average is positioned at $14.41. This indicates a general upward trend. Furthermore, its RSI stands at 43, suggesting the stock is neither overbought nor oversold.
The 3-month MACD is 1.65, indicating a bullish trend. This suggests that the buyers have been in control of the price action more frequently than the sellers, which can be an encouraging sign of positive price momentum in the near term.
Fundamental Analysis
SOXL currently has a PE ratio of 25.73; given the EPS of 0.93, this suggests that investors are currently willing to pay a premium for its earnings.
News Analysis
Recent news sentiment has been somewhat mixed regarding the SOXL's prospects. On the positive side, the ongoing competition in the global Semiconductors industry between the U.S and China could serve as a significant market catalyst to push the stock price higher, as it already resulted in a 100% spike. Furthermore, despite Wall Street's mixed performance, the Direxion Daily Semiconductor Bull 3X ETF was listed among the top-performing leveraged/inverse ETFs.
On the other hand, it has been noted that SOXL's stock often experiences a modest stumble in June. In fact, recent overbuying could lead to a pullback, potentially providing an opportunity to buy at a dip in the near future. A high valuation and elevated implied volatility might also pose a threat to SOXL in the coming weeks.
Predictions
Given these factors, the expected price for the next trading day, July 6th, could see some stabilization following the recent decline. However, the price could face a temporary downward pressure in the short term due to corrections from the overbuying. Given its upward trend in 50-day and 200-day moving averages and potential industry catalysts, the price could likely recover and maintain an upward-crawl in the upcoming weeks.
Evaluation
Considering these observations, the trading behavior, fundamentals, and the latest news sentiment, we categorize SOXL as a 'Hold.' The stock possesses positive undercurrents that suggest a potential spike, but in the immediate term, a pullback might be likely. Thus, new investors might consider waiting for a more opportune lower entry point, while current shareholders might stay put to ride the potential uptrend in the midterm.
