The Direxion Daily CSI China Internet Bull 2X Shares (CWEB) it could be heading toward the most pivotal price point in its three-year history.
While CWEB finished a challenging 2020 with a gain of over 100%, it’s heading towards a key resistance level that, if it manages to break through, could give traders a profitable pop.
The fund seeks daily investment results of 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.
On January 26, 2018, CWEB hit a high of $69.08 and was 27% above its 50-day moving average. Since then, it stumbled across a bearish trend that was helped by a volleyball match of tariffs between the United States and China.
The trade wars did no favors for CWEB as the fund ended 2018 with a loss of over 60% based on Morningstar’s performance numbers. However, it managed to bounced back in 2019 with a gain of over 50%.
A 2020 to Remember for CWEB
As the world adjusted to the new normal of social distancing, the internet space saw strength that helped CWEB’s cause.
After hitting a low of $17.39 on March 16, the fund ended the year at over $60 — a rise of over 240% since that low. CWEB is just hovering above its 50-day moving average, raising questions regarding what the price action will do to start 2021.
The question raised circles back to that 2018 level back in January once again — almost 3 years ago. What are the relative strength index (RSI) and moving average convergence divergence (MACD) technicals saying?
RSI is below overbought levels and the exponential moving average (EMA) looks ready to pierce that signal line. This could mean more buying opportunities ahead to possibly propel CWEB past the January 26, 2018 price point of $69.08 — a 3-year retracement in the making.
Keep CWEB on your watch list.
For more news and information, visit the Leveraged & Inverse Channel.