Quick Win By The Algorithm

Direxion Daily S&P Biotech Bull 3X ETF (LABU)

On September 19th, 2016, the I Know First algorithm gave a 3-days bullish forecast for Direxion Daily S&P Biotech Bull 3X ETF (LABU). The algorithm had given LABU a signal strength of 4.09 and a predictability indicator of 0.21. In accordance with the algorithm’s prediction, LABU rose 20.51%, during the 3-days forecast, resulting in a quick win by the algorithm.

Direxion Daily S&P Biotech Bull 3X Shares (LABU), is an exchange-traded fund, found in 2015 in the USA. The fund seeks to triple (300%) the daily performance of the S&P Biotechnology Select Industry Index, before fees and expenses. This ETF seeks to obtain these returns on a daily bases, and does so through daily leveraging of various biotech and healthcare stocks. It additionally, holds exposures to various options and derivative contracts that it rebalances on a daily bases.

The fund, tracks the S&P Biotechnology Select Industry Index (“index”), as benchmark index, and throughout the course of the 3-days forecast, the index had 6.54% return, as shown by the red line. Biotech stocks had enjoyed overall solid returns, as many companies, specifically small cap ones, had posted positive drug testing as well as, such as Sarepta Therapeutics, Inc. (SRPT), which received FDA approval for its new DMD drug. The fund as well is highly exposed to intra-day volatility, as it is meant for short-term investment, thus utilizes technical analysis as well to achieve its returns.

This fund is considered a more risky investment, relative to a more traditional passive ETF, since unlike traditional ETFs it is a leveraged one thus magnifying both gains and losses of their underlying indexes. Therefore, it is found in our Risk Conscious package, for those investors seeking this type of exposure in the market. This exposure is as best suited for short term investors interested in knowing more about the function of daily leveraging, or buying on margin.

This bullish forecast on LABU was sent to current I Know First subscribers on September 19th, 2016.