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U.S. Leveraged Equity ETF (SPXL) Hits New 52-Week High

Sanghamitra Saha
NantHealth, Inc. (NH) delivered earnings and revenue surprises of 23.08% and -10.83%, respectively, for the quarter ended September 2018. Do the numbers hold clues to what lies ahead for the stock?

For investors seeking momentum, Direxion Daily S&P 500 Bull 3X Shares SPXL is probably on radar now. The fund just hit a 52-week high and is up nearly 72.6% from its 52-week low price of $21.61/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

SPXL in Focus

This fund creates a three times (3x) leveraged long position in the S&P 500 Index while charging 95 bps in fees a year. It has $585.1 million in AUM and trades in heavy volume of around 2.6 million shares on average (see: all the Leveraged Equity ETFs here).

Why the Move?

The U.S. equity market has been an area to watch lately given that the stocks are on a tear. As Irma hit Florida with less-than-expected intensity and North Korea took a breather from serial missile launches, U.S. stocks took an upturn. Plus, Apple’s new iPhones launches and renewed optimism in stock valuation after recent sell-offs boosted the market. In such a scenario, leveraged ETFs lead to huge gains in a short spell.

More Gains Ahead?

It seems that this fund might stay strong given a positive weighted alpha of 57.43. As a result, there is still some promise for investors who want to ride on this surging ETF.

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