(BABX) GraniteShares 1.75x Long - Ratings and Ratios

The GraniteShares 1.75x Long BABA Daily ETF (NASDAQ:BABX) is an actively managed exchange-traded fund that seeks to amplify the daily returns of Alibaba Group Holding Limited (BABA) by 1.75 times through a combination of financial instruments, including swaps, options, and direct stock purchases. This non-diversified fund is designed for investors looking to capitalize on short-term movements in BABAs stock price.

Given its leveraged nature, BABX is likely to exhibit high volatility, making it more suitable for sophisticated investors who can manage the associated risks. The funds investment strategy involves dynamically adjusting its holdings to maintain the desired leverage, which can result in significant gains or losses over a short period.

Analyzing the , we observe that the current price of BABX is $29.19, slightly below its 20-day simple moving average (SMA) of $29.42, indicating a potential short-term downtrend. However, the 50-day SMA ($31.65) and 200-day SMA ($23.81) suggest that the fund has been trending upwards over the medium to long term. The average true range (ATR) of 2.62, representing an 8.97% daily price movement, highlights the funds high volatility.

Using the and , we can forecast that if BABAs stock price experiences a significant surge, BABX is likely to benefit from its leveraged position, potentially outperforming the underlying stock. Conversely, a decline in BABAs stock price could result in substantial losses for BABX. With an AUM of $76.15M, the fund has a relatively modest size, which may impact its liquidity and ability to maintain its leveraged position. Considering the current price and moving averages, a potential trading strategy could involve monitoring BABXs price action around its SMAs and adjusting positions accordingly to manage risk.

Based on the available data, a forecast for BABX could be that it will continue to be highly sensitive to BABAs stock price movements. If BABA experiences a strong upward trend, BABX could potentially reach new highs, possibly targeting the 52-week high of $44.79. Conversely, a decline in BABAs stock price could lead to a drop in BABXs price, potentially testing its 52-week low of $13.04. Investors should closely monitor the funds price action and adjust their strategies to mitigate potential losses or capitalize on potential gains.