Software Green Shoots?
We are a long way from declaring this correction complete. Of course, we will only know in retrospect but I did notice a couple of positives from the space that has been lagging for many months within technology. It is important to observe the PRICE action of how names react to earnings reports. In bearish markets, even the very best of reports will be sold off and that is what has been happening for the most part recently. The last 2 days of the week we witnessed some of the opposites which could be a good sign. On Thursday NOW rose more than 9%, but did CLOSE off session highs as the Nasdaq reversed 400 handles from its intraday high. Friday TEAM also jumped more than 9% after a well-received earnings reaction. It was doing battle with the very round 300 number as before Friday’s CLOSE above it, since 1/13 it was above 300 seven of 8 sessions but recorded just one CLOSE above it on 1/24. These names are still well below their highs made in 2021, but perhaps they can give the software space a much-needed boost.