Direxion Daily Travel &Vacation Bull 2X Shares OOTO was edging about 4% higher on Friday after soaring over 14% between March 24 and Thursday.
Stocks associated with travel and tourism have been heating up recently, as spring sets in and summer approaches. For those bullish on travel and vacation stocks, Direxion offers a trading vehicle with 2X leverage.
The ETF: OOTO is a double-leveraged fund that is designed to outperform companies held in the S&P Energy Select Sector Index by 200%. The index includes a variety of travel-related stocks in the hotel, casino and airline sectors, but also includes stocks in the Entertainment, IT Services, Media, Aerospace & Defense sectors and Equity Real Estate Investment Trusts (REITs).
A few of the top 10 names in the ETF include Walt Disney Co DIS, weighted at 4.78%, Delta Airlines, Inc DAL, weighted at 3.82%, Las Vegas Sands Corp. LVS, weighted at 3.55% and Airbnb Inc ABNB, which is weighted at 4.89% within the ETF.
It should be noted that leveraged ETFs are meant to be used as a trading vehicle as opposed to long-term investments.
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The OOTO Chart: OOTO has soared almost 19% higher since bouncing up off the $10.54 mark on March 24. The move higher caused the ETF to regain the 200-day simple moving average (SMA) as support, which indicates OOTO is experiencing a bull cycle.
- On Friday, OOTO printed a higher high above the most recent lower high, which was formed on March 21 at $12.07. The move caused OOTO to negate its downtrend, although an uptrend hasn’t yet been confirmed with the formation of a higher low.
- Eventually, OOTO will need to retrace to print a higher low. When that happens, traders can watch for the ETF to print a bullish reversal candlestick, such as a doji or hammer candlestick above $11 for a conservative entry position. Bearish traders want to see the stock form a bearish reversal candlestick over the next few trading days.
- If OOTO closes near the high-of-day, the ETF will print a bullish kicker candlestick, which could indicate higher prices are on the horizon on Monday. The second most likely scenario is that OOTO will begin to trade sideways to consolidate the recent upswing.
- Over the longer term, OOTO may be forming a bearish inverted head-and-shoulders pattern.
- OOTO has resistance above at $12.80 and $13.76 and support below at $11.22 and $9.65.
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Image and article originally from www.benzinga.com. Read the original article here.