Buyers Poised for ARK Bounce?

Yesterday I hosted a new episode of Chart Request Live, where we go through the tickers and questions the chat throws at us.

One question came from my friend Larry Thompson, who brought up the ARK funds and noted how these charts are approaching key levels of interest.

These names have taken a hit over the past six weeks, making this an ideal spot for buyers to step in.

Here’s a clean chart of ARK Autonomous Technology & Robotics $ARKQ, pulling back to former cycle highs.

As we know, former resistance often turns into support — a phenomenon rooted in what we call the polarity principle.

When price breaks above a major zone, everyone who missed buying, everyone who wants to add, and everyone who was short and in pain is now waiting for a pullback to that same spot.

So when price returns to the prior resistance, demand kicks in from all three groups at once — turning an old ceiling into a new floor.

Same story for ARK Fintech Innovation $ARKF:

Price is pulling back into a key level around the 61.8% retracement — a zone that has acted as both support and resistance before.

Keep in mind, these are high-beta, speculative risk-on stocks. When they’re performing well, it’s a strong sign that risk appetite is healthy.

That’s why these support zones are potential telltales of what’s coming next for equities.

If they hold, buyers stay in control, and the recent weakness is simply a pullback within a strong primary uptrend, leaving the door open for a year-end rally.

However, if these areas break, the primary trend takes damage — and risk appetite will start flashing warning signs.

Let me know what you think. I’d love to hear from you.

And one more thing…

If you want to spot the biggest moves before they happen, I encourage you to sign up for our new daily note — The Squeeze Watch — and get the tightest coil patterns delivered to your inbox every morning, completely free.

Alfonso De Pablos, CMT

Director of Research, All Star Charts