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TA Monday: Is the ARKK Fund Ready to Play Nice?

October 28, 2024

Mish's Daily

By Mish Schneider

Considering the bull market of 2024, Cathie Wood’s ARKK fund (she has 6 ETFs) over 2 years and a lot of sideways price action, could now be a potential player.

Remember, ARKK peaked in 2021 at 159.70.

Then ARKK crashed to its trough at 29.43 in 2022.

And while we are still not wowed by the overwhelming underperformance, we do think the fund is worth a look as it takes out the April 2024 highs.

Here are the top 5 holdings in ARKK

CW’s 6 ETFs have a total of 137 holdings.

Ark bought a total of 111,387 shares of Tesla in its signature “Innovation” equity-traded fund, ARKK, and its “Next Generation Internet” ETF, ARKW, last week, according to daily transaction disclosures.

CW had 1.4 million shares of Tesla which were sold earlier in the year, making this the first time since April her funds are back in the stock.

I chose to write about ARKK today because our momentum and leadership indicators are interesting.

Currently, ARKK outperforms the benchmark SPY.

Momentum has improved, while the price chart is about to have a golden cross.

And even more significant potentially, is that today, ARKK cleared the July 6-month calendar range high (green horizontal line).

The last time ARKK cleared a 6-month calendar range high was in April, when for 2 whole days, it traded above the January range high.

So yes, ARKK needs to prove more.

What must happen next?

Her top holdings suggest she is bullish in online shopping, robotics, the metaverse and online gambling.

Are those the best areas to be right now?

Teradyne, a robotics company crashed last week.

META reports and is close to new all-time highs.

We like SHOP if it clears the 2024 highs.

Draftkings, Inc. is a meh.

PINS flounders after a horrid performance in July.

The bottom line is this:

The clearance of the calendar range, while intriguing, could also mean another gross failure is possible if the market cannot hold up from here.

What I like is the potential in her top holdings, not the performance thus far.

However, if they do not reach their potential, the fund could be a good short sale.

But if they do begin to perform, then ARKK looks okay now, and way better over 54.00.

That is really where the fun begins and where we will get interested in investing.

I will be away starting tomorrow until Election Day.

Have a listen to the interview with Benzinga and stay tuned for our weekly MarketGauge podcast.

Both will inform you on how we are looking at the election and market results.

Educational purposes only, not official trading advice.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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