The sharp rise in US Treasury yields is certainly not helping the tech sector. In fact, at this stage the Central Banks are focused on fighting inflation, with all the tools at their disposal. The Fed in particular appears highly motivated. US Treasury yields reached new highs for the period on January 14, breaking resistance at 1.77%. This is certainly not a positive signal for techs.
The ARK Innovation ETF, after strong performance in 2020, started an equally strong underperformance compared to the sector benchmarks. The picture of weakness seems to persist and the ETF also tries to pierce the Fibonacci retracement of 61.8% of the entire uptrend started in March 2020 and which reached the top on February 16, 2021. The break of 61.8% would make the reversal of the main (bullish) trend more likely. It therefore becomes an ETF you can go short on. However, we highlight the candle on Friday: a hammer, which could bring a bit of rebound. We therefore recommend the short after a close below $80 for a short target of $74 and $70.
We recommend going SHORT on the ETF at the closing break of $80 by buying the Leverage Shares Short -3X ARK Innovation ETF (ISIN: XS2399368906), with a short-term target towards $74, and then at $70. Alert/stop loss should be above $84 (closing daily).