Two US ETF Under Radar – SPXS and TZA

Overview

This week’s report covers Direxion Daily S&P 500 Bear 3X (NYSE: SPXS), Direxion Small Cap Bear 3X Shares (NYSE: TZA) which are ‘Directional Leveraged ETFs’ that use financial derivatives and debt to amplify the returns of an underlying index, typically by 2x or 3x.  These leveraged ETFs aim to provide magnified exposure to the price movements of a specific asset class, either in the direction of rising (bullish) or falling (bearish) prices.

Section 1: Direxion Daily S&P 500 Bear 3X (NYSE: SPXS)

The Fund seeks daily leveraged investment results of three times (300%) the daily percentage change in the share price of Direxion Daily S&P 500 Bear 3X (NYSE: SPXS). The Fund may enter into one or more swap agreements with financial institutions for a specified period, which may range from one day to longer than a year.

Its performance over extended periods diverges from the expected 300% due to the compounding effect of daily returns, which is influenced by factors like holding duration and stock volatility. High volatility amplifies the impact of compounding, potentially leading to significant deviations from the underlying stock’s performance. Consequently, this ETF is designed for short-term trading rather than buy-and-hold strategies.

Section 2: Technical Analysis on ETF and Underlying Asset

NYSE: SPXS

Direxion Daily S&P 500 Bear 3X ETF (SPXS) continues to exhibit a broad consolidation pattern following a prior downward bias, with price fluctuating within a defined USD 33–37 range. The ETF is currently trading near the convergence of its 20-, 50-, 100-, and 200-period exponential moving averages, reflecting a technical inflection zone rather than a confirmed directional trend. While short-term averages have begun to flatten and marginally turn upward, the longer-term 200-day average remains downward sloping, indicating that structural momentum has yet to shift decisively. The RSI (14) is positioned in the mid-50s, signalling neutral momentum with a mild positive tilt, though not indicative of overbought conditions. Volume remains moderate and does not suggest aggressive accumulation. Collectively, the technical configuration implies equilibrium with a tentative constructive bias, contingent upon a sustained breakout above the upper consolidation boundary and longer-term moving average resistance.

Section 1: Direxion Small Cap Bear 3X Shares (NYSE: TZA)

The Fund seeks daily investment results, before fees and expenses, of three times (300%) the daily percentage change in the share price of Direxion Small Cap Bear 3X Shares (NYSE: TZA). The Fund is an actively managed ETF that attempts to achieve two times the daily percentage change in the share price of the Underlying Security.

Its performance over extended periods diverges from the expected 300% due to the compounding effect of daily returns, which is influenced by factors like holding duration and stock volatility. High volatility amplifies the impact of compounding, potentially leading to significant deviations from the underlying stock’s performance. Consequently, this ETF is designed for short-term trading rather than buy-and-hold strategies.

Section 2: Technical Analysis on ETF and Underlying Asset

NYSE: TZA

Direxion Daily Small Cap Bear 3X Shares (TZA) reflects a prevailing intermediate-term downtrend, characterised by a persistent sequence of lower highs and lower lows since late 2025. Price remains beneath the 100- and 200-period exponential moving averages, both of which are downward sloping, reinforcing a structurally bearish bias despite recent attempts at short-term stabilisation near the USD 6.00–6.50 range. The shorter-term 20- and 50-period averages are flattening, indicating consolidation rather than confirmed reversal. The RSI (14) is positioned in the mid-to-high 50s, suggesting neutral momentum with a mild positive tilt, yet not sufficient to signal a decisive trend shift. Volume patterns appear moderate without evidence of sustained accumulation. Overall, the technical configuration suggests range-bound consolidation within a broader bearish framework, with a durable trend inflection contingent upon a sustained move above longer-term moving average resistance.

Related Risk: Investing in the Fund carries inherent risks, including potential losses. The Fund's NAV and performance are influenced by various factors. Key risks include the effects of compounding, market volatility, and underlying stock risks, which can significantly impact returns and increase the likelihood of financial losses.