As discussed last week in this article about sector rotation, the financial sector is poised to move higher, and we continue to see bullish consolidations in broker/dealers, insurance, and banking stocks.

Direxion Financial Bull 3x ETF ($FAS) is a leveraged ETF with a diversified portfolio of stocks within the financial industry.

On the daily chart below, note the bullish, light volume pullback to the rising 20-day exponential moving average (beige line).

Lower volume during a pullback is bullish because it indicates the sellers are staying away while the buyers are merely taking a rest.

Additionally, there is new support from the prior downtrend line (prior resistance always becomes new support after resistance is broken). Take a look:



Because the current pullback in $FAS provides a low-risk buy entry for a momentum swing trade, we are stalking this ETF for potential buy entry in today's session.

Regular subscribers of our nightly swing trading newsletter should note our exact entry, stop, and target prices for this trade setup in the "Watchlist" section of today's report.

Since $FAS is a leveraged ETF, we are looking for a 20-30% gain over the next two to three weeks (if the setup triggers).

Note that leveraged ETFs are fine for short-term momentum trades of a few days to weeks, but they generally underperform their associated indexes when held intermediate to long-term.

Our existing long position in S&P Retail SPDR ($XRT) finally pushed through a two-week consolidation on a slight increase in volume:



On the chart above, notice the 20-day exponential moving average has also cleared the highs of the base, which should provide additional support on any pullback.

Deron Wagner is the Founder and Head Trader of both Morpheus Capital LP, a U.S. hedge fund, and MorpheusTrading.com, a trader education firm.