Is it time to SOXL again?Hardly excited after a pretty decent bullish bounce in the SPY, SOXL similarly bounced, although it appears to be lagging somewhat. Is it premature, or is it bouncing?
The SOXL daily chart shows the downside target just hit at about 12, at the beginning of September. Two days later a higher low was registered (this is clearer in the hourly chart). The bullish candle yesterday appears to suggest a possible trend change bounce; but risk management (especially for a leveraged ETF like this) prompts for more confirmation and better odds. Some boundaries are needed...
The current gap range needs to be closed clearer and an immediate resistance (above yesterday's high, green horizontal line) needs to be cleared. Then a break into the next gap range above the next resistance (thicker green line) is essential. In fact, a higher high would be much appreciated. These sound like a tall order, but it is opined to be necessary. Particularly since the daily technical indicators have not yet crossed over, so the downdraft might not yet be over.
Having said that, the red support line below the last (higher) low must be maintained. If broken down, price should easily go below 11. The breakdown probability is rather significant currently, although going below 11 is not yet a major risk.
Conclusion... potentially a bounce, perhaps equal probability to be at the start of some sort of consolidation zone, or less likely a pause to dip much further down.
Watch closely, be ready and nimble...
