This is an excerpt from today's subscriber-only DecisionPoint Alert report:
The family of ARK funds have received quite a bit of attention lately. In particular, the ARK Innovation ETF (ARKK) managed by phenom Cathie Wood, has been in the news for months. The fund is in what she calls the "disruptive innovation" companies. Their top ten holdings are below:
Given the Technology sector has been taking it on the chin, it doesn't surprise us that ARKK has been beaten up too. Unfortunately, the holdings above have not been performing well. According to the article today on CNBC, $290 million dollars left the fund last week.
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I actually presented ARKK to my Diamond subscribers back on August 19th 2020 (Diamonds subscribers can click here to view the report). The stop was never hit. Currently the position is up +29.5% since, but at the top, the position was up over 83%. Price is now testing the 200-EMA and the bottom of the current trading channel. Normally we would look at this as an entry to take advantage of the decline to this important area of support; however, the indicators are particularly ugly. The RSI is negative and not oversold yet. The PMO triggered a crossover SELL signal today well-beneath the zero line. It began underperforming the market late February and continues to underperform.
Conclusion: Given the very negative indicators, this is a high risk play despite price sitting on a support level that it previously rallied from. Consider this as well, she is adding more money to some of these positions in all of her funds. With the market beginning to top, I don't like it.
Happy Charting! - Erin
Technical Analysis is a windsock, not a crystal ball.
Helpful DecisionPoint Links:
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Price Momentum Oscillator (PMO)
Swenlin Trading Oscillators (STO-B and STO-V)
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