Almost three years ago, the Direxion Daily CSI China Internet Bull 2X Shares (CWEB) reached a high of $69.08. Fast forward to today, and the ETF is at $81.11. Momentum is obviously on the side of CWEB, and the fund could keep on climbing.
CWEB seeks daily investment results equal to 200% of the daily performance of the CSI Overseas China Internet Index, which is designed to measure the performance of the investable universe of publicly traded China-based companies whose primary business or businesses are in the Internet and Internet-related sectors.
The fund has been approaching a pivotal price point of retracing back to that high in 2018. Once there, CWEB broke loose. On January 8, the fund reached a high of $69.79 and has risen 16% since, en route to a new high since its inception back in November 2016.
The current reading on the relative strength index (RSI) of 71.39 confirms the momentum.
Low Volume? No Problem
Currently, CWEB ranks sixth in terms of the top performing leveraged funds for ETF provider Direxion Investments. The funds is up about 32% on the year, accomplishing this despite the lowest average daily volume in the top six.
The fund’s largest allocation at 9.55% is Chinese tech giant Tencent Holdings. The stock itself is up over 70% within the past year and almost 25% year-to-date.
When factoring in the double leverage, traders can amp up their exposure to these top-performing Chinese equities and maximize profits. Against other indexes like the MSCI China index and the Nasdaq CTA Internet Index, the outperformance is apparent, with CWEB up over 130%.
The 50-day moving average appears to be a key level of support looking. On July 22, 2020, the golden cross made itself known when the 50-day moving average moved past the 200-day moving average.
A stochastic relative strength index (StochRSI) reading shows a level of 1.00, which confirms the high momentum. A moving average convergence divergence (MACD) indicator has the exponential moving average (EMA) above the signal line: more confirmation of strong momentum.
CWEB is up 30% within the past month and almost 50% within the past three months.
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