Wait a sec, $ARKK is out performing $AAPL? Scott takes a look… – May 19, 2022
AAPL QQQ SPY ARKK U
This is Scott with your Chart of the Day. We are going to look at a couple of charts here. Do you know the old saying, so goes Apple ( NASDAQ: AAPL ), so goes the market and that is really the case here. Apple ( NASDAQ: AAPL ), closing near the lows. QQQ ( NASDAQ: QQQ ), closing near the lows. SPY ( NYSEARCA: SPY ), closing near the lows.
But there is one ETF that I found was outperforming Apple ( NASDAQ: AAPL ) today and it caught me way off guard, that is Cathie Woods’ ARK ( NYSEARCA: ARKK ). Now there has been a ton of shade thrown Cathie Woods way. I personally think Cathie is great. I think she is extremely intelligent and I love her outlook on the future, technology, and the overall market.
I look at the ARK ( NYSEARCA: ARKK ) ETFs all the time, ARKK ( NYSEARCA: ARKK ), ARKG ( BATS: ARKG ), ARKF ( NYSEARCA: ARKF ), all part of my scanning protocol on a daily basis. And so I was actually surprised when I saw ARKK ( NYSEARCA: ARKK ) was up on the day and Apple ( NASDAQ: AAPL ) was down on the day.
I’m scratching my head, what is happening? What world are we in? I couldn’t figure it out, and then I looked at ARKK ( NYSEARCA: ARKK ). Then I looked inside the ETF, and you can to that here on TC2000. You can press a little button, open the window and you can see everything, well, pretty much, that is in the ARKK ( NYSEARCA: ARKK ) ETF. And look at this, all of those things are up bigly today, with Unity ( NYSE: U ) up 11 percent.
Now, just looking at Unity ( NYSE: U ), we’ll look at some others soon, pretty much everything in this ETF has been crushed, along with the ETF itself. And so when we have this huge extension to the downside we get that big snapback to the upside. Even from November, Unity ( NYSE: U ) at one point was down about 86 percent. But just in the last week and a half or so from the low, it is up 42 percent.
And so I think that is why we are seeing a lot of strength in ARKK ( NYSEARCA: ARKK ). Because we have all of these things that are massively oversold and bouncing hard. But it is bringing some stability here to the ARKK ( NYSEARCA: ARKK ) ETF. Because as you can see, the last couple of days it has just gone sideways, it is in a nice sideways range.
And so I do have a little piece of ARKK ( NYSEARCA: ARKK ) right now and I would like to get bigger in the position, but first I am going to see some higher highs. I am really going to want to see it get above this base right here. I think, from a short-term perspective, you have clear short-term support down there at around the 40.60 level Longer-term support down here at 35.00. And so from a short-term perspective, this is the range that I care about. From a longer-term perspective, I probably care about that $35.00 level.
But for now, I want to see this get above and stay above that level and test the underside of these moving averages. Really give us some higher highs and bring price closer to the 50-day moving average, that’s the red line here. And the reason for that is because typically when ARKK ( NYSEARCA: ARKK ) can get back above the 50-day moving average, whether it’s is up here, whether time goes on and the price eventually moves up to it, that is really, in my opinion, when you can get a nice trend on it.
The last couple of ones have failed, clearly, and so it has been a clear level of resistance.
But even back here in July and June, as soon as ARKK ( NYSEARCA: ARKK ) got above the 50-day moving average, and did it on decent volume, you had a clear level to define your risk off of. You could say, okay, it closed below the 50-day and I am out. And then it just kind of chugs along nicely and gives you a nice trending trade to the upside. Those are my favorite kind of trades.
This choppy sloppy mess is not really my favorite, I don’t make a lot of money in this. But I do, do quite well on these nice trends that are above the 50-day moving average and climbing up that 8-day exponential. And so that is what I will be looking for here on ARKK ( NYSEARCA: ARKK ) eventually. I would like to see this start to trend to the upside. But first, it has got to break out of this constitutive base.
If those stocks that are inside the ETF continue to bounce to the upside, if those shorts continue to cover then I think we are going to see a move here on ARKK ( NYSEARCA: ARKK ). So I am going to set an alert on my platform right around that 44.20 level and then I will look for strength and a strong close above there to swing a position.
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