ARKK Trading Inside Value Area

The ARKK ETF skyrocketed from pandemic 2020 lows of 33.00 all the way to all-time highs in early 2021 of 159.70. It has since traded all the way back to those 2020 price levels. However, if you are a supporter of the ARKK ETF, then now could be a good time to enter for long term investors. Why? Let us look at the weekly chart dating back to the inception of this fund in 2014. You can see the largest volume profile ledge was established between 46.35 and 35.35. This, in my opinion, is a key value area for this ETF. A doji candle with a long lower shadow also formed on the weekly chart signaling a potential loss of downward momentum. As far as upside resistance, the first major zone appears between 60.50 and 76.57. This zone contains a volume profile ledge, the 34 EMA wave, a symmetrical Fib retracement, and the 50 WMA. There are a couple of ways to play this ETF.

You could enter inside this 46.35-35.33 zone with a percentage risk-based stop. You would just enter inside this value area and look to ride out its volatility over a longer-term horizon (5+ years).

Or you could enter inside this 46.35-35.33 zone with a tight stop below the VP ledge around 31.50. You would then look to scale out somewhere inside the first resistance zone between 60.50 and 76.57 while moving a trailing stop on the remainder of your position to break even. If prices were able to break above resistance, then the next resistance target comes into play around 110.75.

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