ARK Innovation ETF: Is ARKK signaling that stocks have bottomed out?


  • ARKK ETF was up over 1% on Wednesday as it continues to recover.
  • ARKK stock is up nearly 10% over the past week.
  • As one of the riskier growth ETFs, ARKK may a signal of the bottom.

ARK Invest and Cathie Wood have been a favorite target of bears in the first half of 2022 with the former high-flying fund manager and ETF both falling from grace as 2022 progressed into bear market territory. Now though a curious outperformance has begun, not just in ARKK but across the tech and high-growth sectors. Does this point to a stock market bottom, or is this just a pause before another leg lower?

ARKK stock news

ARKK is down 66% from June 2021, 57% for 2022, and 38% over the past three months. Lately though, we have begun to see a possible bottom in the growth and tech space. Let us take a look at some formerly beaten-down names and sectors to illustrate.

ARKK weekly chart

ARKK has stopped short of the $33 low from March 2020 or the pandemic low.

Another high-risk, high-growth sector also looks to have bottomed out. See below the chart of KWEB ETF. This is the China Internet ETF and includes such names as Alibaba, JD.com, Baidu, etc. 

KWEB ETF chart, daily

Things look slightly less positive for the DJ Internet Fund or FDN ETF, but it still has so far held the pandemic lows and looks oversold on both the Relative Strength Index (RSI) and Money Flow Index (MFI) indicators. This one holds the likes of Netflix, Paypal, Airbnb, Twitter, Amazon, Meta, Google, etc.

FDN ETF chart, weekly

The percentage of stocks trading above their 200-day moving average has continued to fall in this bear market. The chart below shows the number of stocks above their 200-day moving average (green line) to be at 15% of the overall number of stocks on the NYSE. Previous moves under 15% are associated with bottoms in the S&P 500 (orange line).

For June, growth and momentum stocks have outperformed value. Chart below shows Value ETF (VLUE) in orange versus Momentum (MTUM) in green and Growth (SPYG) in blue.

ARKK Stock forecast

Have we bottomed out? That is a big ask. My feeling is that this is merely some position adjusting ahead of the end of the first half of the year and option and flow needs. The next earnings season should finally see Wall Street analysts lower their EPS forecasts, which could see a bottom form sometime in late summer or fall. $35 remains key short-term support in ARKK, and then the $33 pandemic low is huge.

ARKK daily chart

 


Like this article? Help us with some feedback by answering this survey:

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales

EUR/USD hits two-week tops near 1.0500 on poor US Retail Sales

The selling pressure continues to hurt the US Dollar and now encourages EUR/USD to advance to new two-week peaks in levels just shy of the 1.0500 barrier in the wake of disappointing results from US Retail Sales.

EUR/USD News
GBP/USD surpasses 1.2600 on weaker US Dollar

GBP/USD surpasses 1.2600 on weaker US Dollar

GBP/USD extends its march north and reclaims the 1.2600 hurdle for the first time since December on the back of the increasing downward bias in the Greenback, particularly exacerbated following disheartening US results.

GBP/USD News
Gold maintains the bid tone near $2,940

Gold maintains the bid tone near $2,940

The continuation of the offered stance in the Greenback coupled with declining US yields across the board underpin the extra rebound in Gold prices, which trade at shouting distance from their record highs.

Gold News
Weekly wrap: XRP, Solana and Dogecoin lead altcoin gains on Friday

Weekly wrap: XRP, Solana and Dogecoin lead altcoin gains on Friday

XRP, Solana (SOL) and Dogecoin (DOGE) gained 5.91%, 2.88% and 3.36% respectively on Friday. While Bitcoin (BTC) hovers around the $97,000 level, the three altcoins pave the way for recovery and rally in altcoins ranking within the top 50 cryptocurrencies by market capitalization on CoinGecko. 

Read more
Tariffs likely to impart a modest stagflationary hit to the economy this year

Tariffs likely to impart a modest stagflationary hit to the economy this year

The economic policies of the Trump administration are starting to take shape. President Trump has already announced the imposition of tariffs on some of America's trading partners, and we assume there will be more levies, which will be matched by foreign retaliation, in the coming quarters.

Read more
The Best Brokers of the Year

The Best Brokers of the Year

SPONSORED Explore top-quality choices worldwide and locally. Compare key features like spreads, leverage, and platforms. Find the right broker for your needs, whether trading CFDs, Forex pairs like EUR/USD, or commodities like Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures

Best Brokers of 2025