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The information provided on EL7.AI is for educational and informational purposes only and does not constitute financial advice.
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Sign InAmid sharp fluctuations in technology stocks, the Direxion Daily Semiconductor Bull 3X ETF (SOXL) is facing mounting risks of technical value decay. According to analyst reports, the fund, which aims to deliver triple the daily performance of the semiconductor sector, is suffering from erosion due to high volatility, making it unsuitable for long-term holding. The leveraged nature of the instrument accelerates losses in choppy markets, even when the broader sector trend appears stable.
This warning comes as the semiconductor sector experiences mixed pressures compared to its peers, with stocks like Nvidia and AMD recording significant price swings over the last quarter. Per market data, similar leveraged ETFs often fail to match benchmark performance over extended periods due to daily rebalancing effects. Compared to non-leveraged instruments like SOXX, the cumulative performance gap becomes evident during market correction phases.
Regarding current levels, SOXL closed at $164.18 (as of May 15, 2026), trading between a low of $161.14 and a high of $174.40 during that session. Traders should monitor upcoming catalysts, including the Chinese Manufacturing PMI scheduled for June 30, 2026, which could impact global chip supply chains and further heighten price volatility for the ETF.