After being hit hard in 2025, the group has spent most of the year repairing damage and trying to find its footing while much of the market has gone vertical.
On an absolute basis, $IGV is now attempting to complete a short-term reversal base right at a key support zone.
This is an important area on the chart, and it’s not the first time price has behaved this way here.
The last time Software traded around these levels, the entire group eventually ripped higher.
Now zooming out a bit.
On a relative basis, the Software vs Semis ratio is more extended from its 200-day moving average than at any other point on record, creating conditions for potential mean reversion.
Leadership trends can persist for a long time, but they rarely move in a straight line forever. Eventually, capital shifts, and leadership broadens.
And that’s exactly the kind of behavior you want to see in healthy bull markets.
To me, Software still looks like a group with plenty of room to catch up if money continues rotating back into the space.
I’ve been adding exposure to my portfolio recently. Yesterday I bought $APP common stock and added $CRM calls as part of our Wave Trader strategy.
