SOXL Sinks 12% as Chip-Sector Selloff Sparks 3× Leverage Shakeout Near $42 Support
$Direxion Daily Semiconductors Bull 3x Shares(SOXL)$
$42.80 (−11.90%): Semiconductor bulls hit by sharp de-risking as 3× leverage tests $42–45 support
Market Recap:
Direxion Daily Semiconductor Bull 3X Shares (SOXL) sank −11.9% to $42.80, unwinding a chunk of its recent breakout from the low-40s and closing well off Monday’s highs near $48–49.
The move comes after an extended run that still leaves the ETF up ~57% YTD, but a broad pullback in chip names and profit-taking in AI beneficiaries triggered aggressive de-leveraging.
Volume around 80M shares was in line to slightly above its already-elevated average, confirming active positioning rather than a quiet drift lower.
Technical Indicators Analysis:
On the daily chart, price has snapped back to just below the rising 20-day EMA ($42.93) while staying comfortably above the 50-day EMA ($37.6), keeping the larger up-trend intact but signaling a short-term shakeout.
MACD remains positive with lines near 3.1/3.1 and a flattening histogram, showing momentum cooling rather than a full bearish crossover. RSI(14) has slipped from overbought toward the low-50s, indicating a transition from momentum chase to consolidation.
Over the next week, base case is choppy trading between $41–47: holding above $42 keeps the door open for a rebound toward $46–48, while a decisive close below $41 would expose the 50-day zone at $38–37.
Support: $41-42
Resistance: $51.83
Valuation and Target Range:
SOXL itself is a 3× leveraged ETF on a semiconductor index and doesn’t have a traditional fundamental “fair value,” but its fact sheet shows an underlying basket trading around 42× TTM earnings—richer than the S&P 500’s high-20s multiple and consistent with the sector’s high-growth, high-beta profile.
After this pullback, tactical bulls may eye $41–42 as a risk-defined re-entry zone targeting a short-term rebound into $47–50, while acknowledging that any further derating in chip valuations or macro-driven volatility could quickly push prices back toward the mid-30s.
Risk Statement:
Leveraged ETFs magnify both daily gains and losses and can suffer large drawdowns, especially in volatile sectors like semiconductors. This commentary is for technical reference only and does not constitute investment advice or a recommendation to buy or sell any security.
Data Source: Yahoo Finance & TradingView (daily chart, Nov 4 2025). Prepared by Tiger Morning Brief | All data as of Nov 4 2025 | For internal use only.
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