Tech’s Recovery Could Take Time: 2 ETFs to Consider


The Nasdaq 100 ends 2022 32% lower, with bullish tech traders expecting a turnaround in 2023, but like all good things, it can take time. That said, there are always opportunities to play upside and downside using leveraged ETFs (Exchange Traded Funds) in Direxion Investments’ arsenal of tactical funds.

Right now, big tech companies are draining talent in the form of mass layoffs. This is a carryover from last year, so I don’t know when the new year will stop.

From Google to Amazon, the biggest tech stars are wiping out their pent-up workforces at the height of the pandemic. Of course, it was a time when we were more dependent on technology as consumers went online to buy goods and services, but that is no longer the case.

“Massive job cuts by Amazon.com Inc, one of the largest private employers in the U.S., could lead to a wave of layoffs sweeping the tech sector through 2023 as companies rush to cut costs. , analysts said on Thursday (Jan. 5).” Reuters reported.

“With the demand boom during the pandemic collapsing rapidly, tech companies will cut more than 150,000 workers in 2022, according to tracking site Layoffs.fyi. It’s been increasing as we’ve started,” the report said. said further.

A Persistent Bearish Outlook on Big Tech Directions Daily Technology Bear 3X ETF (TECS)TECS seeks daily investment results before fees and expenses of 300% of the inverse (or reciprocal) of the daily performance of the Technology Select Sector Index.

Profits-eating inflation certainly played a role in weakening tech giants in 2022. But if the recession hits again, as it did in 2008, cutting costs in the form of layoffs could be a way for tech giants to protect themselves.

Greg Selker, managing director of executive search firm Stanton Chase, said:

Optimism for Tech Rebound

Not everyone is predicting doom and gloom for the tech sector. The mass layoffs that are occurring could offer investors a growth option and a fresh start for big tech companies as companies could become slimmer and meaner in 2023.

In that case, there is an opportunity to go bullish. Directions Daily Technology Bull 3X ETF (TECL)This fund offers the same 3x leverage as TECS, but with a decidedly bullish trend.

TECL could become a major strategy if tech companies can show early signs of a turnaround, but that could take time. If earnings reports and his 2023 outlook are optimistic, TECL could offer traders a short-term upside.

“Despite the macro/Fed wildcard, we believe the tech sector as a whole will rise about 20% in 2023 from current levels, so there is an opportunity for growth amid this carnage,” said Daniel Ives. Managing Director of Equity Research at Wedbush Securities.

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