Will Software Provide Formidable Tech One-Two Punch?
Technology has been under assault for most of 2022, and that can be forgiven as the prior 3 years between 2019-21 all gained between 30-50%. It is rare for the sector to have back-to-back annual losses, and the last 14 years witnessed just 2 declines (with 2018 losing less than 1%). If there is to be a rebound which is a good chance historically speaking in 2023 software will have to make a splash. Below is the chart of the IGV it has essentially traded sideways since last September, and it is one thing to stop going down, but a whole other thing to break a downtrend and start ascending. The first week of 2023 got off to a poor start with the IGV down .9%, but it did fill in a gap, while the Nasdaq rose 1% and the SMH by 4.3%. Last week the SMH jumped 6.7%, and the IGV was in line with the Nasdaq up in the 5% neighborhood. ORCL is the only name in the top 5 holdings trading well right at 52-week highs, as CRM ADBE MSFT, and INTU are all below their 200-day SMAs, and at least 25% from most their annual peaks. This group needs to participate.