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Intel Earnings Lift Leveraged Chip ETF to Key Technical Level


Shares of Dow component Intel (INTC), the world’s largest semiconductor maker are higher by 1.1% in midday trading Wednesday after the company reported third-quarter EPS of 58 cents on revenue of $13.5 billion. Analysts expected earnings of 53 cents a share on revenue of $13.47 billion.

Intel’s news has been enough to lift the iShares PHLX Semiconductor ETF(SOXX) 1% to within pennies of its 52-week high. The $235.7 million ETF allocates almost 8% of its weight to Intel.  The Market Vectors Semiconductors ETF (SMH) , which has an almost 19% weight to Intel, is also up nearly 1%.

However, risk-tolerant investors may want to have a look at the Direxion Daily Semiconductor Bull 3X Shares (SOXL) . SOXL attempts to deliver three times the daily performance of the PHLX Semiconductor Sector Index, the underlying index for SOXX.

More upside could be on the way for SOXL, which has more than doubled year-to-date, as the leveraged ETF is now flirting with key technical levels.

“In terms of the trend, the moving averages in SOXL point to a strong uptrend, with the 20-day exponential moving average now above the 50-day moving average, and the 50-day moving average above the 200-day moving average. All three averages are also trending higher (this moving average analysis can be done on SMH with the same result), further confirming an uptrend is in place,” said Deron Wagner of Morpheus Trading Group.

SOXX’s index recently underwent some changes that are notable for investors in that ETF as well as SOXL.

“Ten new companies in the Semi space were added to the index while ten were deleted, in attempts to make the overall index more consistent with who is driving growth and innovation in various corners of these markets,” said Paul Weisbruch of Street One Financial earlier this week. [ETF Chart of the Day: Sweet for Semis]

“For example, as iShares noted, additions to the index include QCOM, ASML, MXIM, and FSL, which in retrospect, it’s quite hard to believe that some of these names, particularly QCOM was not added to the index eons ago,” he added.

SOXL is up nearly 6% in the past week and has annual fees of 0.95%.

Direxion Daily Semiconductor Bull 3X Shares

ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of Intel.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.