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The biggest news out of Wednesday’s Duke-North Carolina basketball game was not the result (No. 8 North Carolina defeated No.1 Duke 88-72), but rather the injury suffered by Duke start freshman Zion Williamson.
Early in latest installment of college basketball’s most storied rivalry, Williamson sprained after his Nike, Inc. (NYSE: NKE) shoe collapsed and came apart as Williamson was attempting to reverse direction.
What Happened
On above-average volume, shares of Dow component Nike fell 1.05 percent yesterday, but analysts believe incident, while embarrassing for Nike, will not have a significant long-term impact on the company.
While Williamson’s sparked renewed debate regarding compensation for college athletes and allowing high school basketball players to skip college to go straight to the NBA, there are some other results of the unfortunate injury.
Why It’s Important
A day of bad public relations for Nike brought tests for the Direxion Daily Consumer Discretionary Bull 3X Shares (NYSE: WANT) and the Direxion Daily Consumer Discretionary Bear 3X Shares (NYSE: PASS).
WANT and PASS debuted last November as the first triple-leveraged exchange traded funds (ETFs) tracking the consumer discretionary sector, where Nike resides. The bullish WANT attempts to deliver triple the daily performance of the Consumer Discretionary Select Sector Index while the bearish LACK looks to deliver triple the daily inverse returns of that index.
With a weight of about 5 percent, Nike is the fourth-largest holding in the index WANT and PASS track. While volume was above the daily average in both funds, WANT and PASS behaved modestly yesterday. The bullish WANT lost 0.44 percent while the bearish PASS gained 0.42 percent.
What’s Next
Entering Thursday, PASS was among the 10 best bearish Direxion ETFs on a month-to-date basis.
While Nike will likely move past the shoe collapse, WANT and PASS still merit consideration for tactical traders, particularly those looking for leveraged plays on Amazon.com Inc. (NASDAQ: AMZN) because that stock represents 21.62 percent of the Consumer Discretionary Select Sector Index.
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© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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