Direxion Funds doesn’t have a long history as a provider of ETFs, but it quickly became a big player in the industry by offering some of the most popular ETF’s around – the 3x leveraged ETFs.  It initially launched with just a few offerings in financials, energy, small caps and large caps, but has since expanded to include technology, treasuries, emerging markets and real estate.

Back in April, they filed with the SEC to launch many more 3x leveraged ETF’s as well as a two non-leveraged ETF’s for the auto and airline parts industries.  Should the Auto ETF begin trading, it would be the first ETF to cover the auto industry. 

The new 3x leveraged ETF’s would include 8 pairs of bull/bear ETF’s covering international markets such as Brazil, Canada and Russian while 9 others will be industry specific covering agribusiness, commodity producers, infrastructure, gold miners, home construction, natural gas, regional banks, water, and wind energy.

None of the proposed ETF’s have begun trading at the time of this writing.

The Direxion Financial Bull 3x ETF (FAS) is one of the popular ETF’s around, so I’d thought I’d take a technical look at it.  As you can see it’s been on fire, catapulting from 60 to over 100 in just a few months.  It’s looking mighty tired and overstretched though. 

Stochastics reveal that the FAS ETF hasn’t been this overbought since last August and taking a look at the volume of the past two weeks shows buyers may be tiring up at these levels.  The bottom line is that FAS is due for a pull back off these levels.  The first level of support is around 95 and if it can’t hold there, 88 is the next level.  There is strong support all the way down to the 70 level which is the 50 weekly moving average (an area it’s found support at twice now).  A break below 70 would indicate financials are rolling over.