Software stocks have been under pressure since October, but the evidence suggests a tradable low may be forming — and a short-term bounce could be underway.
The iShares Software ETF $IGV just registered its highest volume ever this week — and by a wide margin.
When I see volume expand like that after a sustained decline, I think capitulation.
Now price is back testing a critical support zone — the same level that marked major turning points in both 2024 and 2025.
Each time IGV reached this area, it went on to rally roughly 50%.
I don’t make a habit of catching falling knives or fighting trends.
But if you’re going to step in, you need a very good reason — and even more importantly, clearly defined risk management. Without that, you’re asking for trouble.
Momentum remains in a bearish regime, but there’s also a bullish divergence in play, as the 14-day RSI continues to make higher lows despite lower lows in price.
As long as IGV holds above 76, the conditions are in place for a bounce.
That’s my line in the sand. That’s the level where the market proves me wrong.
If there’s ever a time and place for Software to mean-revert higher, this is it.
To express this view, I also bought call options in Palantir Technologies $PLTR as part of our Breakout Multiplier strategy.
