Trump 2.0 Presents Both Promise And Pitfalls For Direxion's Small Cap Bull And Bear Funds

While the Direxion 3X ETFs are convenient, investors should note the volatility risks involved in these financial products. As Direxion's website states, these leveraged ETFs are designed for trading exposure lasting no longer than one day.

The TNA ETF: Although the chart for the Daily Small Cap Bull ETF is a choppy affair, anticipation of a much more business-friendly environment has bolstered sentiment recently.

  • Over the trailing one-month period, TNA gained almost 8% of value, driving the price action above the 200-day moving average (DMA).
  • Technical resistance lies at the 50 DMA, which currently stands a bit above $48. For the bulls, this will be the next natural target.

The TZA ETF: A volatile canvas, the Daily Small Cap Bear ETF has struggled over the past 52 weeks, losing more than 45%. However, an economic shock could revitalize the inverse fund.

  • For proponents of the TZA ETF, it's vital for the bear fund to keep its head above the psychologically and technically significant $10 level.
  • Right now, the 50 DMA provides support for TZA. Moving forward, the upside target is where the 200 DMA stands at a few clicks above $15.

Featured image by Gerd Altmann from Pixabay.

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