(MSTX) Defiance Daily Target 1.75x - Ratings and Ratios

The Defiance Daily Target 1.75x Long MSTR ETF (NASDAQ:MSTX) is a leveraged exchange-traded fund that aims to provide 1.75 times the daily return of MicroStrategy Incorporated (MSTR). To achieve this, the fund enters into swap agreements with financial institutions, which can have a term ranging from one day to over a year, allowing it to gain exposure to the underlying securitys performance.

The funds investment strategy is focused on financial instruments that are expected to perform in line with 2X the daily performance of MSTRs shares, with a minimum exposure of 80%. As a non-diversified fund, MSTX is heavily reliant on the performance of MSTR, making it a high-risk investment. This concentration can result in significant gains or losses, depending on the direction of MSTRs stock price.

Given the current technical data, MSTX is trading at $37.00, below its 20-day SMA of $38.17, indicating a potential short-term bearish trend. However, its 50-day SMA is at $35.65, suggesting a longer-term bullish trend. The 200-day SMA at $38.99 implies a strong long-term uptrend. The ATR of 3.67 (9.92% of the last price) indicates high volatility, which is expected for a leveraged ETF. With an AUM of $1210.03M USD, the fund has a substantial asset base, which can contribute to liquidity and stability.

Forecasting MSTXs performance involves analyzing both technical and fundamental data. If MSTRs stock price continues to rise, MSTX is likely to benefit due to its leveraged long position. However, if MSTR experiences a significant decline, MSTX could suffer substantial losses. Based on the current SMA indicators, a potential short-term correction may be followed by a longer-term uptrend, assuming MSTRs stock price continues to rise. Therefore, a prudent investment strategy would be to monitor MSTRs performance closely and adjust holdings accordingly. A potential trading strategy could involve buying MSTX on dips towards the 50-day SMA and selling on rallies towards the 20-day SMA, while keeping a close eye on the overall trend and adjusting as necessary.