Social distancing measures brought on by the pandemic gave way for bullish moves in technology, especially those that relied on the internet, which fed into explosive gains for the Direxion Daily Dow Jones Internet Bull 3X Shares (WEBL).

WEBL seeks daily investment results, before fees and expenses, of 300% of the daily performance of the Dow Jones Internet Composite Index. The fund, under normal circumstances, invests at least 80% of its net assets (plus borrowing for investment purposes) in financial instruments that track the index and other financial instruments that provide daily leveraged exposure to the index or to ETFs that track the index.

The index includes companies that generate at least 50% of their annual sales/revenue from the internet as determined by the index provider. Per Yahoo Finance numbers, WEBL is up over 100% year-to-date.

WEBL Chart

Tip of the Iceberg for WEBL Gains?

This could just be the tip of the iceberg for WEBL as the internet industry is expected to grow exponentially. Even after the pandemic subsides, web-based services will only continue to grow as the internet of things (IoT) expands.

Per a press release, “the global Industry 4.0 Market was estimated at USD 70 Billion in 2019 and is expected to reach USD 210 Billion by 2026,” the report noted. “The global Industry 4.0 Market is expected to grow at a compound annual growth rate (CAGR) of 17% from 2019 to 2026.”

This, of course, bodes well for WEBL, which is up 133% within the past year alone. In terms of a trade opportunity, the fund is running above its 50- and 200-day moving average in its year-to-date chart.

Using a relative strength index (RSI) technical indicator, WEBL has yet to cross over into overbought territory so it might signal a good time for traders to get in on WEBL or wait if there’s any year-end sell-offs close to Christmas time.

WEBL Chart

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