(HXD) BetaPro S&P/TSX 60 -2x - Ratings and Ratios

The BetaPro S&P/TSX 60 -2x Daily Bear ETF (HXD) is a Canadian ETF that employs a leveraged inverse strategy, aiming to deliver twice the opposite daily return of the S&P/TSX 60 Index. This means it is designed for investors betting against the performance of the top 60 Canadian stocks listed on the TSX.

To understand HXDs potential, we must recognize its underlying index, the S&P/TSX 60, which represents Canadas largest and most liquid stocks, covering a broad spectrum of sectors. The ETFs performance is inversely related to this index, amplified by a factor of two. This makes HXD a high-risk, high-reward instrument, suitable for sophisticated investors or those with a strong conviction in the short-term decline of the Canadian blue-chip market.

From a technical standpoint, HXDs recent price action indicates a potential for volatility, with its ATR standing at 0.87, or 4.19% of its last price. The ETF is currently trading below both its 20-day and 50-day simple moving averages (SMA20 and SMA50), suggesting a bearish short-term trend. However, its price remains above its 200-day SMA, indicating a longer-term bullish trend. Given the 52-week high and low of 27.82 and 4.51, respectively, HXD has shown significant price swings, underscoring its leveraged nature.

Considering the AUM of 30.70M CAD, HXD has a relatively modest asset base, which could impact liquidity. However, it remains a viable option for investors seeking inverse exposure to the Canadian markets largest stocks.

Forecasting HXDs performance involves analyzing both the technical indicators and the fundamental data. If the S&P/TSX 60 Index is expected to decline, HXD could potentially rise. Given its current technical indicators and assuming a continuation of the bearish trend in the S&P/TSX 60, HXD might see a short-term increase. However, its leveraged nature means it is highly sensitive to market movements, and any reversal could lead to significant losses. A potential trading strategy could involve closely monitoring the S&P/TSX 60s performance and adjusting HXD positions accordingly, or using it as a hedging tool against a potential downturn in the Canadian market.

For a more precise forecast, one would need to closely monitor the S&P/TSX 60 Indexs movements and adjust expectations for HXD accordingly. If the index were to drop by 1%, HXD could potentially rise by 2%, before fees and expenses. Conversely, a 1% rise in the index could result in a 2% decline for HXD. This inverse relationship, combined with its leveraged factor, makes HXD a potent tool for investors with a bearish outlook on the Canadian markets largest stocks.