One of the main points of attraction for EVAV stock is convenience. Rather than take risks on individual EV companies, an investor can gain exposure to a basket of securities under one umbrella. In addition, the 2X leverage of this bull fund provides the possibility of robust returns without having to engage in more complex transactions, such as options.
Nevertheless, it's important for prospective traders to understand the unique risks associated with leveraged ETFs. In particular, Direxion notes that EVAV should not be expected to provide two times the return of the benchmark's cumulative return for periods greater than a day. Holding onto this ETF for longer than one trading session may expose stakeholders to value decay due to the daily compounding of leverage.
The EVAV ETF: Against a longer-term framework, EVAV doesn't initially seem enticing, given its trailing 52-week loss of over 11%. However, since late summer last year, the bull fund has been steadily swinging higher.
- On a technical level, EVAV has been rising in a clearly defined ascending trend channel, with the 50-day moving average providing rising support.
- Although the bears attempted to drive EVAV down in November, the bulls quickly asserted control, providing confidence for speculators.
- Next steps will involve decisively securing the $25 baseline while making a concerted effort to rise above the psychologically important $30 level.
Featured image by Paul Brennan on Pixabay.
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