Software is coming off the an extremely volatile streak following some of its best and worst months in history.
May was a good time to flip the book long, but the sector then spent all of June going down.
Undoubtedly there will still be many losers in the space; zombified companies that stay alive while their stocks go nowhere and their business models slowly erode due to AI disruption.
But the winners on the other side of this move are going to be massive. And right now, the space is setting up once more.
The Software ETF $IGV is currently exhibiting a squeeze score of 85.3 and a long-term squeeze score of 88.2.
Here’s what the chart looks like:
The IGV is in the middle of a violent trend reversal following one of its worst negative streaks in history.
Right now, price is pressing against the June high VWAP, with volatility on the Strazza Indicator back at the lower end of it's YTD range.
Plenty of software stocks are setting up for another leg higher and we want to be ready when they trigger.
A strong breakout above the June high VWAP would confirm this as an attractive pond to fish in.
