Nothing “Soft” About It:
Competition is always a good thing, and inside the tech sector software and the semiconductors have been rivals. It has been one sided in softwares favor recently, but the semis in the last 5 weeks have stood up well for themselves. You can see this on the bottom of the daily software chart below of the IGV (did record bearish harami cross, doji candle Wednesday). Now remember ratio charts just show how 2 instruments are acting against one another relatively speaking. On an absolute basis both can be acting well, and that is what is happening at the moment with the SMH and IGV. Each one is keeping the other honest. With the IGV one has to come away impressed how it has digested the huge run off the early April lows. During the 5 of 6 week winning streak the weeks ending between 4/11-5/16 it produced four WEEKLY gains of 7, 9, 5, and 5.5% and all of them CLOSED at or well within the upper half of the WEEKLY range. The last 2 have traded in taut fashion and this week so far which has formed a bull flag, a positive development. These normally resolve to the upside in a continuation pattern, and give this ETF credit after top ten holding CRWD fell 6% after an ill received earnings reaction. It followed a recent pattern of software security stocks not acting well PRICE wise folling a release as we discussed in our 5/29 Technology Note. CRWD was able to bounce near a bull flag breakout pivot of 350 Wednesday.