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<\/p>\nBull market heroes often become bear market villains.<\/p>\n
Nobody knows this better than Cathie Wood, CEO of Ark Invest.<\/p>\n
From March 2020 to February 2021, Wood’s flagship fund – the Ark Innovation ETF (ARKK) – went on an incredible run.<\/p>\n
ARKK ran from a March 2020 low of $33 to a high of over $159 by February 2021. That’s an incredible 384% move.<\/p>\n
ARKK was the definition of peak bull market mania.<\/p>\n
Investors flocked to the fund, eager to buy into Wood’s vision of the future.<\/p>\n
The holdings in her ETF were all selected because of their ability to change the way the world works.<\/p>\n
Tesla, for example, makes up about 10% of the entire holdings. Wood believes that Tesla is the future of human transportation, with its coming fleet of robo-taxis completely disrupting the auto and rideshare industries as we know them.<\/p>\n
Unfortunately, investors have been losing faith in Wood’s stock-picking strategies.<\/p>\n
Since putting in its $159 high, ARKK has sold off as much as 81%, eventually finding a bottom in December 2022.<\/p>\n
This brings us to the current year, where ARKK has been volatile once again. The ETF started off the year on a very strong note, even rallying almost 55% between January and February.<\/p>\n
Since then, however, ARKK has given back as around half those gains.<\/p>\n
And right now, my technical analysis of ARKK suggests that there’s another big move just around the corner.<\/p>\n
Let’s look at a price chart of ARKK so I can walk you through what I see. <\/p>\n
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This price chart has a constellation of important moving averages (MAs) all trading in a very tight range of prices.<\/p>\n
We’re looking at the 20-, 50-, and 200-daily MAs. Notice how they’re all clustering tightly together. This means that the market is gearing up for an explosive move, either higher or lower.<\/p>\n
Here’s how either scenario could play out…<\/p>\n
<\/p>\n
Free Trading Resources<\/strong><\/p>\n Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n <\/p>\n The bullish case would see the market punch through all three MAs, clearing the way for a much bigger move to the upside.<\/p>\n In this scenario, the market will likely run as far as it did during its late December 2022 to early February 2023 rally.<\/p>\n At that time, ARKK rallied by $14.77 or almost 50%. An equivalent rally this time would see ARKK trading around $49.50.<\/p>\n On the other hand, the bearish case would see ARKK break down below the December 2022 low of $29.64.<\/p>\n In this scenario, the MA constellation will serve as resistance, effectively putting a lid on any immediate upside.<\/p>\n The good news is that while both scenarios are possible, the market will let us know in just the next few days which way prices will break.<\/p>\n Either way, there’s a great trading opportunity at hand.<\/p>\n Happy trading, <\/p>\n
Imre Gams<\/p>\n