What would be the stop for SOXL? It is down today compared to the other ETFs.
The stop for SOXL or any stock or ETF depends on your maximum stop loss. Some investors set it at 7-8%, as recommended by O'Neil. Others may set it slightly lower or slightly higher depending on their risk tolerance levels. SOXL is one of the more volatile ETFs. We bought it when the MDM issued a buy signal on September 1, so it is still showing a small gain. Our options going foward are that we continue to hold it, or switch into a stronger performing ETF, or scale out entirely, depending on market conditions. In general, we prefer to keep maximum stop loss anywhere between 5 to 10%, depending on the volatility of the instrument. In practice, we often sell before it reaches this maximum point.
SOXL is down today because Intel (INTC) was downgraded today to neutral. Some semiconductors are moving into new technological realms such as cloud computing while others such as INTC are slower to make that move. Thus the SOX index, while being one of the more volatile ETFs thus poses larger upside than other ETFs, could also lag over a longer timeframe. Switching out of or halving ones position is certainly an option.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2017 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.