AXS Short Innovation Daily ETF SARK held steady in trading on Monday, juxtaposed with the Cathie Wood-led ARKK Innovation ETF ARKK maintaining a similar position near Friday’s close.
In a market where ARKK struggled to outperform the broader index since April 22, 2022, hovering below its high of $55, the S&P 500 has surged approximately 17% over the same period.
Designed to capitalize on the declining fortunes of disruptive innovation, SARK is an actively managed fund that mirrors its counterpart, the AXS 2X Innovation ETF TARK, but in an inverse manner.
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For traders favoring a bullish stance on ARKK, the 2X Innovation ETF by AXS is engineered to provide returns that double the daily performance of ARKK.
For the more seasoned traders in the arena, SARK and TARK introduce opportunities for increased leverage through options trading.
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Delving Into the SARK Chart: The SARK ETF has been mostly trading within a narrow band of $25 to $30 since mid-December. An intriguing trend emerged between February and March, hinting at a potential bullish upturn.
- The formation of an apparent inverted head-and-shoulder pattern within the trading range signifies a likely uptick if SARK breaches $27.90 with robust volume, suggesting a 7.5% ascent towards the $30 resistance level.
- Evidence of mild bullish divergence is observable, presenting a scenario where SARK creates lower lows alongside its ETF counterpart making higher lows. This divergence may resolve either through an upward movement in SARK or a dampening of momentum in the ETF over time.
- Optimistic traders anticipate SARK breaking above $27.90 with high trading volumes to confirm the inverted head-and-shoulder pattern. Pessimistic traders, on the other hand, are watching for a significant increase in bearish volume that could push SARK below $25.48, potentially catalyzing a downtrend.
- Key resistance levels for SARK are positioned at $27.90 and $30.13, with support zones established at $26.60 and $25.66.
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