Ark Invest CEO Cathie Wood’s flagship fund might recover sharply if a positive technical pattern holds.
According to the chart pattern, it appears as though Cathie Wood’s Ark Innovation ETF is getting ready for an enormous breakthrough.
If one were to trust a bullish technical pattern, the flagship fund managed by Ark Invest CEO Cathie Wood could be about to experience a significant price increase.
If one is to believe a bullish technical pattern, then the flagship fund managed by Ark Invest CEO Cathie Wood could soon experience a significant price increase.
According to Douglas Busch, the founder and CEO of ChartSmarter, the Wood’s Ark Innovation ETF (ARKK) is exhibiting characteristics of a “bullish ascending triangle” at the present time.
Price movements that enable a horizontal line to be made along the highs and a rising trendline to be established along the lows are what give rise to the so-called ascending triangle pattern. This pattern can be seen in the chart below.
The intersection of the two lines results in the formation of a triangle.
“Higher lows since the middle of May keep been pushed back to the vicinity of $47. “Break above there might have catastrophic consequences,” warned Busch.
The exchange-traded fund (ETF) posted a rise of 9.10 percent on Tuesday, which was its highest daily performance since May 13 and its second positive session in a row. This suggests that the breakout may have already begun.
Before the current surge in value, the well-known investor was having a difficult 2022 due to the fact that her “revolutionary technology darlings” have been among the worst losers this year as a result of rising interest rates.
ARKK has dropped a staggering 65 percent from its 52-week high, bringing its year-to-date loss to an astounding 52 percent.
However, recent macroeconomic shifts may be supporting what the ARKK chart is predicting based on what it is showing in the charts. Since a month ago, oil prices and interest rates have reversed course, relieving the inflation fears that have been wreaking havoc on growth stocks such as the ones that Wood owns.
Recent comments made by Wood to CNBC indicate that the majority of her clients are continuing to work with her, and that fresh money is coming in as investors look to diversify their holdings in light of the current market conditions. According to FactSet’s records, ARKK has seen an increase in capital of more than $1.3 billion this year.
Recently, a few of ARKK’s most valuable holdings have shown signs of improvement. The largest holding that makes up 10 percent of ARKK, Zoom Video, has seen its value increase by more than 9 percent in the month of July.
Roku, which holds the second largest shareholding, has seen its value increase by more than 6 percent this month.