Beyond Software Implications:

Microsoft is still firmly the 2nd largest company on planet Earth by market cap, but it has not been doing the software group any favors with its recent performance. It is now 9% off its most recent 52-week highs although as seen on the ratio chart below against the IGV it has been fading since the start of May. Now it does not carry as much influence as it has slipped to the 4th biggest component in the ETF behind ADBE ORCL and CRM. But in both the S&P 500 and QQQ it is easily the second largest holding and if this can get moving with this nascent jump above its 50-day SMA it could give the software space a jolt. We have seen peers like ETSC OKTA and VEEV, just to name a few, explode higher. It is still trying to put its recent 5-week losing streak, its first since the COVID lows well more than 3 years ago, in the rearview mirror. Keep in mind the “old tech” names are putting in a rejuvenation with stocks like CSCO IBM and INTC leaving it behind. Time to play catch up?

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