The ARK Innovation Fund (ARKK) was the Street darlings in the last couple of years and had been vigorously chased up. It soared 150% in 2020... thanks to the performance of Tesla (its largest position, at 10% of the ETF's assets) and stay-at-home stocks like Zoom Video Communications (ZM), Roku (ROKU), and Teladoc Health (TDOC) in its top 10 holdings. But its good time came to the end in Feb this year: after ARKK reached its all time highs in mid Feb, it now trades roughly 31% below its 52-week high due to the poor performance of Tesla and other top 10 holdings. Has it done its job on the slope down? Probably not yet!
As shown below, it has just broken down from the triangle wedge as well as pierced through its 200 DMA long term support line. Its 50 DMA is trending down, poised for a death cross. All these poor TA setups are coming up during the seasonally bearish months. I doubt ARKK will simply bounce back and recover from the loss. We may see another 20% haircut before the final bottom is seen.
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