Ark Innovation ETF ARKK Surges Above 200-Day SMA, Offering Growth Opportunity for Traders
In a significant development, the Cathie Wood-led Ark Innovation ETF ARKK experienced a surge of almost 5% on Tuesday, propelling it above the crucial 200-day simple moving average (SMA). This milestone is highly regarded by technical traders and investors, who consider a stock trading above the 200-day SMA on the daily chart as an indicator of a bull cycle. On the other hand, a stock trading below the 200-day SMA is seen as being in a bear cycle.
The 200-day SMA holds immense importance in technical analysis as it helps decipher market trends. Traders closely monitor the interplay between the 50-day SMA and the 200-day SMA. When the 50-day SMA crosses below the 200-day SMA, it triggers a bearish death cross. Conversely, a bullish golden cross occurs when the 50-day SMA surpasses the 200-day SMA.
For traders and investors seeking leveraged exposure to ARKK, there is an intriguing option available. The AXS 2x Innovation ETF TARK is an actively managed fund that aims to deliver double the daily performance of ARKK. By employing leverage, TARK enhances trade performance, potentially resulting in significant gains for traders.
By trading TARK, investors can capitalize on the upswings in ARKK, which primarily holds stocks in innovative sectors such as electric vehicles, next-gen Internet, genomics, and fintech. ARKK’s largest holdings comprise Tesla, Inc (TSLA) at 10.75% weight, Roku, Inc (ROKU) at 8.35% weight, and Zoom Video Communications-A, accounting for 7.65% of the fund’s holdings.
It is important to note that leveraged funds like TARK are designed for short-term trading and may not be suitable for long-term investment strategies.
Analyzing the ARKK chart, it is evident that the ETF had a back-test of the 200-day SMA on August 18. This retracement was healthy and encouraged by robust volume, indicating that the algorithmic systems recognized the significance of the indicator. Since then, ARKK has validated a new uptrend, consistently forming higher highs and higher lows.
Traders and investors are taking notice of ARKK’s remarkable performance and its recent surge above the 200-day SMA. With the potential for continued growth, ARKK offers an exciting opportunity for those bullish on disruptive innovation. And for those seeking amplified exposure, the AXS 2x Innovation ETF TARK stands ready to provide double the daily performance of ARKK.
As always, it is crucial for investors to conduct thorough research and consider their risk appetite before making any investment decisions.
