Up almost 40% to start the year, the Direxion Daily Retail Bull 3X ETF (RETL) has momentum on its side. Will that momentum continue with forthcoming holiday shopping data? RETL traders will be watching closely.

“Retailers suffered their worst annual sales performance on record in 2020, driven by slump in demand for fashion and homeware products,” a BBC News article said.

RETL seeks daily investment results of 300% of the daily performance of the S&P Retail Select Industry Index. With its triple leverage, RETL gives investors the ability to:

  • Magnify short term perspective with daily 3X leverage;
  • Go where there’s opportunity, with bull and bear funds for both sides of the trade; and
  • Stay agile, with liquidity to trade through rapidly changing markets

RETL invests in securities found within the index, which is a modified equal-weighted index that measures the performance of the stocks comprising the S&P Total Market Index. The fund has successfully been able to parry the effects of the pandemic since the sell-offs in March, giving bullish retail traders much to cheer about to end 2020.

On its one-year chart, RETL looks difficult to stop, with the fund up over 130%:

RETL Chart

The momentum spike in RETL can be confirmed with technical indicators like the relative strength index (RSI) and the moving average convergence divergence (MACD). RSI is well into overbought levels at 82.98.

On the MACD side, the exponential moving average (EMA) is above the signal line, which confirms the strong momentum. As such, traders may want to hang back and keep RETL on their watch lists to see how the ETF reacts as more holiday shopping data surfaces.

RETL Chart

Food Sales Are Up. That’s About It

The British Retail Consortium is already saying that while “food sales growth rose 5.4% on 2019, non-food fell about 5%. It meant an overall fall of 0.3% in a year dominated by the Covid-19 impact, the worst annual change since the BRC began collating the figures in 1995.”

“Physical non-food stores, including all of non-essential retail, saw sales drop by a quarter compared with 2019,” said Helen Dickinson, BRC chief executive.

“Christmas offered little respite for these retailers, as many shops were forced to shut during the peak trading period,” she added.

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