Direxion Daily Financial Bull 3X Shares
) - This highly leveraged
(ETF) seeks to deliver three times the daily performance of the
Russell 1000 Financial Services Index.
After the April high at close to $40, FAS plunged to below its
bullish support line before reversing from a
under $18 in late August. Since then, it has traded in a bull
channel with support at around $25.
But on Friday, it rallied following the release of the Fed's
results from its second round of stress tests. The purpose of the
tests was to provide a "road map" to allow financial
institutions, especially banks, to redistribute capital to
Immediately following the stress test results, many banks
announced their intentions to raise dividends and, in the case of
JPMorgan Chase & Co.
), to do additional share repurchases. Nineteen financial
institutions were named and could make big moves higher as a
result of the announcement.
This is a significant development for the financial group and
could result in a quick trade in FAS to $35-plus.
Leveraged ETFs like FAS require active, daily monitoring and
management, and are not suitable for long-term investors. The SEC
warns that returns over longer periods will likely differ in
amount and even direction.
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