Brian Shannon on $SOXL (Oct 27, 2026)
SOXL has trended down but made higher lows off support around 80 and a rounded bottom, then recovered above a key gap level in a bearish trap, so the setup is constructive if you own it; a stop below about 88 is 12 points away and too far, so he would tighten stops at partial profits near 105, the VWAP anchored from the start of the year, and trail it under each new high.
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Since June, when you were coming, it was said that if you set a stop loss on SOXL today, how many dollars would you get? There was a lot that was clearly not being told to us, and thank you for the super chat on this topic.
But let's discuss the processes that might have encouraged you to invest in it, okay? As SOXL is trending down, we're heading into earnings season, you might like that it's made a few higher lows than before, here you're making a little bit of a rounded bottom, so you think you've got confirmation here.
This is the rounded bottom, so in theory you bought it. So, having said that, I do n't know if this is exactly what the audience is doing, but if we assume that, well, we've come back from some support around 80 and we're buying on this breakout.
Now the simple answer would be to place a stop below. My question to you was, how do you view the risk and reward of SOXL technically right now? Whether it's a stop loss or a place to take profit, that's where we can help the audience.
But back to SOXL, if you have it, great. It seems like, you know, that's what I was actually looking for in terms of SMH, to have it drop below the summer lows and then come back up again.
So, if you're involved in this, I think you should look at the anchor from this gap, because that was an important psychological point from which it recovered. So, basically, when it bounced back past this level, it meant it was a bearish trap.
So, I think a safe stop should probably be below around 88. The problem is that it's 12 points away and who wants to lose that much profit? I definitely wouldn't do that. I would n't put any stops there.
However, I think if it gets to a level near 105 and it looks like it's ready to break through some barriers, I'll start tightening my stops there at partial profits and that's where we see the VWAP anchored from the beginning of the year.
Otherwise, if it starts to do something like that, i.e. drop a little bit and then reach a new high again, I will move my stop below it and continue this process until the stop is out.