The ARK Innovation ETF (NYSE: ARKK) had another rough morning on Friday as its brutal month continues. Shares of the popular tech ETF are now down 18.9% in the past month, but Bank of America technical analyst Stephen Suttmeier said Friday that the technical picture for ARKK and several of its top holdings is more bullish than it may seem at first glance.
ARKK Technical Picture: On Friday, Suttmeier said the ARKK ETF still has rising 26-week and 40-week moving averages, a bullish indicator.
“ARKK is holding these MAs as support in the $118.85 to $104.74 range so far with a bounce into the key retracements for the mid-February to early March decline in the $126.67 (38.2%), $132.98 (50%) and $139.28 (61.8%),” Suttmeier said.
Related Link: Why Doug Kass Says ARK Invest Unwind A ‘Bona Fide Market Risk Now’
Trading Ideas: Suttmeier said ARKK’s overall technical picture is bullish, but several of its top holdings are set up well from a technical perspective as well.
He said Crispr Therapeutics AG (NASDAQ: CRSP) endured a 50% correction from mid-January to March. So far, technical support in the $132 to $115 range has held, suggesting the rally could resume in the near future.
Suttmeier said EXACT Sciences Corporation (NASDAQ: EXAS) is also testing key technical support in the $124 to $111 range. A breakout to the upside could push the stock to between $171 and $200, he said.
Fate Therapeutics Inc (NASDAQ: FATE) appeared to have formed a bearish double top pattern in January and February. However, Suttmeier said Friday that the stock’s recent rally back above $80.50 suggests the double top failed, a bullish indicator.
Suttmeier said Tesla Inc (NASDAQ: TSLA) also held a critical support level at around the $600 level. He said the bounce suggests Tesla could rally at least to its next resistance level between $780 and $804.
Suttmeier said the charts of ARKK holdings Teradyne, Inc. (NASDAQ: TER), Pure Storage Inc (NYSE: PSTG) and Paypal Holdings Inc (NASDAQ: PYPL) also suggest a technical bounce could be just around the corner.
Benzinga’s Take: Suttmeier’s bullish technical analysis of these seven stocks suggests short-term upside. However, Bank of America also has Buy ratings on six of the seven stocks mentioned as well, suggesting potential for more than just short-term trades. The lone exception is Neutral-rated Tesla.
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