The Triple X SP 400 Midcap Strategy

Mid-Cap Stocks: A Sweet Spot for Your Portfolio

Mid-cap stocks, which are companies assigned market capitalizations between $2 billion and $10 billion, fill the gap between the bigger, more established players of the large-cap indexes and the emerging players in the small-cap category. Mid-cap stock index investing gives access to a dynamic basket of companies who carry more unique advantages.

Consider the growth potential. These companies are beyond the startup phase and are often in the unique position of having the ability to face any number of umpteen potential high-growth opportunities: international expansion, new product launches, market share expansion, potential for future acquisitions, and many more. Less volatile than small cap stocks but also with lower long-term return than the big boys for the S&P 500, stocks, which are companies with market capitalizations of $10 billion or more.

For aggressive traders seeking to amplify their exposure to mid-cap opportunities, consider the Direxion Daily Mid Cap Bull 3X Shares (symbol MIDU). The Triple X S&P 400 Midcap Strategy employs the following technical indicators:

  • Buy Signal: 3-month Simple Moving Average (SMA) crosses above the 18-month SMA.

  • Sell Signal: Money Flow Index (MFI) falls below a predefined threshold.

This strategy works effectively because it uses the 3-month Simple Moving Average (SMA) to identify potential bullish momentum by spotting when the stock's short-term performance surpasses its long-term trend, indicated by crossing above the 18-month SMA. This crossover suggests that the stock is moving out of an accumulation phase and has not yet reached overbought conditions, making it an optimal time to buy. On the other hand, the Money Flow Index (MFI) acts as a counterbalance by identifying overbought or oversold conditions. When the MFI falls below a certain threshold, it indicates that the stock may be overbought or weakening, prompting a sell-off.

A Word About the Direxion Daily Mid Cap Bull 3X Shares (symbol MIDU)

The Direxion Daily Mid Cap Bull 3X Shares seeks daily investment results, before fees and expenses, of 300% of the performance of the S&P Mid Cap 400® Index. There is no guarantee the fund will achieve its stated investment objective. This leveraged ETF seeks a return that is 300% of the return of its benchmark index for a single day. The fund should not be expected to provide three times the return of its benchmark’s cumulative return for periods greater than a day.

Index Information

The S&P Mid Cap 400® Index (SPTRMDCP) is a float-adjusted market capitalization weighted index that measures the performance of 400 mid-sized companies in the United States. One cannot invest directly in an index.