SOXL Stock Price: The Direxion 3x ETF Is Down 10.9% in a Month

The SOXL stock price, Direxion Daily Semiconductor Bull 3X Shares (NYSEARCA: SOXL), has fallen 10.9% in the past month as semiconductor stocks such as Intel pulled back following a rally that took the ETF to a high last seen on February 2, 2023, to form a double top pattern, as shown in the chart below.

The double-top pattern is generally regarded as bearish and has played out exactly as expected, with the SOXL price now near the structure’s bottom. Is there hope that the recent decline will end and the SOXL price will recover and rally higher?

For SOXL to rally higher, the leveraged ETF has to bounce off the neckline of the double-top pattern, which is yet to happen. Hence, we cannot say that we have seen the end of the recent pullback in the SOXL stock price. 

Looking at the ETF’s fundamentals, a rally in the SOXL stock price will have to be driven by a rally in the underlying semiconductor stocks tracked by the ICE Semiconductor Index (ICESEMIT), which cannot be traded since it is an index. 

The SOXL ETF tracks the underlying index’s bullish movements and tends to fall when the ICESEMIT index falls. However, its losses and gains tend to be three times those of the underlying index since it is a leveraged ETF, as demonstrated by its name as a 3X bullish ETF. 

The last rally in semiconductor stocks was driven by the emergence of ChatGPT, which many investors correctly predicted would lead to higher demand for semiconductor chips, which drove the rally in SOXL stock up to its February highs. 

Another rally in semiconductor stocks would increase the SOXL stock price as the underlying index rises. The gains one can make with SOXL are much higher since it multiplies the gains in the underlying index by three. 

However, the losses are also three times bigger, which leads me to the universal warning about inverse ETFs. An inverse ETF is not a long-term investment asset and should only be traded by experienced investors who hold it for short durations as a hedge against other positions. 

*This is not investment advice. 

SOXL stock price. 

The SOXL stock price has fallen 10.91% in the past month. Is it headed lower? Read on to find out.