Software Ready To Act Anything But?

As technology stubbed its toe this week with the SMH off almost 4% this week, and has now CLOSED at or near the lower half of the WEEKLY range 5 of the last 6 weeks, software stood out on a positive note. Relative strength was displayed with the IGV advancing last week by .6%. It is now just 2% off its most recent 52-week highs versus the SMH which is 7% off its own annual peak and the outperformance could be telling. The WEEKLY chart of the IGV below shows a long cup with handle base that started with a 3-week tight pattern that broke lower (the weeks ending between 7/14-28 all CLOSED within just .77 of each other). Individual names that shined last week include GWRE and SNOW which recorded a bullish island reversal with the gap up Friday following the gap down on 8/8. We all know however that the top holdings will be the ones that really move the needle in the fund. ORCL will provide some clues with its earnings reaction Monday after the close.

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