Software Time To Shine?
Over the last 2 months, there has been a melancholy feel over the software space if one were comparing it to the semiconductors. If one did want to zoom out at a different time frame, the MONTHLY chart has the look of a very clean cup with handle base 2 1/12 years long. A move above 88.92 in the near term would carry a measured move to 130. The WEEKLY chart registered a break above a bull flag Friday and the previous 3 weeks all CLOSED very taut, all within just .52 of each other and we know from that type of consolidation often comes powerful moves. For sure one would have to look at the top 3 holdings in MSFT CRM and ORCL which make up one-quarter of the fund to ponder its future. Microsoft looks best although it did record a bearish harami Thursday, Salesforce was rejected at its downward-sloping 50-day SMA with a bearish dark cloud cover Thursday, and Oracle is carving out the right side of a cup base after a gap fill last month at the 200 day SMA. Comparing the overall group to the semis, the ratio chart may have a very different look after next week’s NVDA report. Software bulls want to see real strength from it’s own group and not rely on a potential NVDA miss to improve the relationship.