For investors seeking momentum, Direxion Daily S&P 500 Bull 3X Shares (SPXL - Free Report) 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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