Software Supply:

An abundance of new issues from the software group in 2021 may be responsible for the underperformance within against the semiconductors. From a very simplistic point of view, the SMH is just 4% off its most recent 52-week highs, while the IGV is 12% off its annual peak. Give credit for the SMH bouncing off its rising 50 day SMA for the first time following the double bottom breakout above a 274.01 pivot on 11/1. Getting back to software is the plethora of IPOs this year to blame for its lackluster behavior as of late? Of course, no one knows the answer and as always one should always look at each individual name based on its own merits. Below is the chart of PUBM, and it came public last December, but its chart is worth taking note. It is now 55% off most recent 52 week highs, and it came public with much fanfare running from a low near 22 to a high of 77 in its first couple months of trading. A bearish dark cloud cover WEEKLY candle the week ending 3/5 lost 25.1% and sent it forcefully lower. It has since given back half of the huge WEEKLY gain of 47% the week ending 11/12 and looks like a decent risk/reward scenario here with a tight stop below 32.

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