Benzinga - by Melanie Schaffer, Benzinga Editor.
Tesla, Inc (NASDAQ: TSLA) gapped up over 5% to start Tuesday’s trading session, which Benzinga called out on Monday was likely to happen.
The significant move higher helped to cause the Cathie Wood-led Ark Innovation ETF (ARCA: ARKK) to follow north, gapping up over 4%, while the AXS 2X Innovation ETF (NASDAQ: TARK) started Tuesday’s session up over 8% higher.
TARK is an actively managed double-leveraged ETF aiming to return 200% of the daily performance of the ARK Innovation ETF, the latter which holds an 8.53% weighting of Tesla but offers diversification through multiple other holdings.
Must Read: Early Believer In Tesla And NVIDIA, Cathie Wood And Her Firm Changed Modern Investing - Just What Does ARK Invest Offer?
Trending: US Inflation Eases More Than Expected In October, Cements Expectations For End Of Interest Rate Hikes
Technical traders who anticipated on Monday that Tesla would trade higher on Tuesday, especially because the stock regained the 200-day simple moving average as support, and chose to play the move through TARK, have enjoyed twice the reward on their investment as of Tuesday when the market opened.
Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.
The TARK Chart: On Monday, TARK formed a hammer candlestick just below the 50-day SMA, which suggested higher prices were likely to come on Tuesday. On Tuesday, the ETF gapped up above the 50-day on high volume on smaller timeframes, indicating a high level of interest in TARK.
- TARK’s move higher also confirmed the ETF’s uptrend remains intact. The most recent higher low was formed on Monday at $51.83 and the most recent confirmed higher high was printed at the $58.40 mark on Nov. 8.
- If TARK closes Tuesday’s trading session near its high-of-day, the ETF will form a bullish kicker candlestick, which could indicate higher prices will come again on Wednesday. If that happens, the ETF is likely to run into at least temporary resistance at the 200-day SMA.
- Bearish traders may want to wait for the bulls to lose interest, which could eventually be seen through declining volume on larger timeframes. If that happens, the gap formed on Tuesday is likely to fill.
- TARK has resistance above at $65.46 and at $77.20 and support below at $56.50 and at $48.74.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.