Earnings Avalanche Puts Emphasis On Leveraged Tech ETFs


Among sector and industry leveraged exchange-traded funds this year, leveraged gold miners ETFs are grabbing most of the headlines, but with earnings season here, this could be an ideal time for risk-tolerant traders to revisit leveraged fare from other sectors.

Leveraged Tech ETFs

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Other sectors include technology, the largest sector weight in the S&P 500, and the leveraged ETFs of choice are the Direxion Daily Technology Bear 3X Shares (Direxion Shares Exchange Traded Fund Trust (NYSE:TECS)) and the Direxion Daily Technology Bull 3X Shares (Direxion Shares Exchange Traded Fund Trust (NYSE:TECL)).

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TECL, the triple-leveraged bull ETF, attempts to deliver three times the daily returns of the S&P Technology Select Sector Index. That is the same index tracked by the Technology SPDR (ETF) (NYSE:XLK), the largest technology ETF by assets. TECL, Direxion's bearish technology offering, seeks to deliver triple the daily inverse performance of that index.

Big Tech Earnings Ahead

Dow component International Business Machines Corp. (NYSE:IBM) got the tech earnings parade started Monday, but there is more where that came from. Making TECS and TECL potentially alluring trades is the fact that Microsoft Corporation (NASDAQ:MSFT), Intel Corporation (NASDAQ:INTC) and QUALCOMM, Inc. (NASDAQ:QCOM) all step into the earnings confessional as well.

As of July 15, in order, Microsoft, Intel, IBM and Qualcomm combined for about 19 percent of the S&P Technology Select Sector Index's weight.

This is not the only week where TECS or TECL could deliver big moves for traders. On consecutive days from July 26 through July 28, Apple Inc. (NASDAQ:AAPL), Facebook Inc (NASDAQ:FB) and Google-parent Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) report earnings. Those stocks combine for about 30 percent of the index TECS and TECL track.

Semiconductor Earnings Ahead

With big-name semiconductor manufacturers reporting earnings this week, traders can get even more tactical with the Direxion Daily Semiconductor Bull 3X Shs (NYSE:SOXL) and the Direxion Daily Semiconductor Bear 3X Shares (NYSE:SOXS).

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SOXL tries to deliver triple the daily performance of the PHLX SOX Semiconductor Sector Index, while SOXS, the leveraged bearish chip ETF, attempts to deliver triple the daily inverse performance of that index.

The PHLX SOX Semiconductor Sector Index is followed by the iShares PHLX Semiconductor ETF (iShares S&P NA Tec. Semi. Idx. Fd.(ETF) (NASDAQ:SOXX)). That ETF devotes just over 16 percent of its combined weight to Intel and Qualcomm.

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