Software Leadership Grip Teetering?
The battle between the semiconductors and software rages on. To be fair the combat regarding the two important groups has been one sided for some time. Software has reigned supreme, and to me that grip may be softening. The semiconductors have the burden of proof, to show they deserve to be mentioned in the same sentence as software. The ratio chart shows perhaps the semis are looking to make a stand, as premature as it may be with a recent higher low. Looking at individual names in the chip space it is difficult to see a real leader, but the ratio chart may keep heading higher by default as software names look toppy.
Not Such A “Secure” Name:
Probably one of the better ETF symbols out their HACK, was all the rage not to long ago. The hype has settled down, but the importance of cyber security will never go away. The fund is digesting a 10 week winning streak that started 2019 off, and I was surprised to see CSCO as the the top component. Some names have not been acting well, with both PANW and FTNT in bear market mode down more than 20% from their most recent 52 week highs. Below is a real laggard in FEYE, now 29% off its most recent peak after having issues with the very round 20 number last fall.
We have always mentioned how very taut, tight trade is a hallmark bullish characteristic (and the opposite wide and loose action is a bearish trait). Below is a good example of that and the chart of ROKU and how it appeared in our 6/17 Technology Report. This name has acted well versus technology peers throughout 2019, and now happens to be defending the very round par figure well. Leaders give one an opportunity to add on the way up, and this stock did just that breaking above a bull flag pivot near 85 last month, AFTER taking out a double bottom pivot of 71.40 on 5/9.