Software (IGV): The software benchmark gained ~7% last week on above average volume, bouncing year-to-date lows.
The index is likely to face resistance near $261, followed by the 50-DMA ($273). On the downside, support is near $250.
Technical profile remains weak, with RS line continuing to trade sideways and a lowest-possible A/D Rating of E. Industry
group performance remains vulnerable with six of the 11 software-related groups ranked #100 or worse across the 197
O’Neil groups. But seven of the 11 groups showed an improvement in Group Rank over the last four weeks. Overall, we
continue to maintain a cautious outlook on the IGV and its software constituents.
Symbol: WWE
O’Neil TMT Weekly
Software (IGV): The software benchmark declined ~6% last week and recorded a new year-to-date low. It is now trading
well within its pandemic base and is vulnerable to further decline. Next support is in the $230–240 range. Technical profile
remains weak with RS line approaching its mid-May lows and a worst-possible A/D Rating of E. Industry group
performance remains weak with six of the 11 software-related groups ranked #100 or worse across the 197 O’Neil
groups. We maintain a cautious outlook on the IGV and its software constituents.
O’Neil TMT Weekly
Software (IGV): The software benchmark bounced into its 21-DMA resistance ($265) and faded, paring majority of the
gains. The IGV is retesting its year-to-date lows ($249) due to persistent weakness across large caps (MSFT and NOW).
Next level of price support is in the range of $230–240. It has a weak technical profile with RS line near multi-year lows, an
RS Rating of 32, and the worst possible A/D Rating of E. Industry groups remain weak with seven of 11 groups ranked
#100 or worst. The best ranked groups, Tech Services (#72) and Design (#74), have deteriorated over the last four weeks
due to increasing distribution in large caps (ACN and SNPS). We maintain a cautious outlook on the IGV and software
constituents.
O’Neil TMT Weekly
Software (IGV): The software benchmark declined less than 1% last week and remains slightly below June lows ($255).
The IGV is extended below its 21-DMA and oversold in the short term. The next level of price support is between $230–
240, which coincides with the 2020 COVID base. Quantitative ratings remain weak, with RS line at multi-year lows, RS
Rating of 30, and A/D Rating of D-. IGV weakness is primarily due to distribution across large caps constituents (MSFT,
ACN, and ORCL) however a selective group of stocks (see below) are back above key moving averages with
improving relative strength and are setting up technically. Monitor these stocks closely should the overall market
bounce back up from oversold levels. Outside of the aforementioned selective stocks, we maintain a cautious outlook on
the IGV.
O’Neil TMT Weekly
Software (IGV): The software benchmark declined 5% on above average weekly volume and breached its June lows ($255). The next level of price support lies in the 2020 COVID base between $230–$240. Quantitative ratings on the IGV remain weak, with RS line at multi-year lows, RS Rating of 27, and the weakest possible A/D Rating of E. All 11 software-related groups declined 4–9% last week and continue to trade below their respective 50- and 200-DMA. We maintain a cautious outlook on the IGV and its constituents.
O’Neil TMT Weekly
Software (IGV): The software benchmark declined ~8% last week and is currently trading at its 13-week lows. It is trading below all its key moving averages (8% below 50-DMA) and is at risk of testing its June lows of $255, which is the next level of price support. The index has a weak technical profile with its RS line near its 52-week low, an RS Rating of 28, and an A/D Rating of D-. Industry group performance remains weak with nine of the 11 software-related groups ranked #100 or worse across the 197 O’Neil groups. We continue to maintain a cautious outlook on the IGV and its software constituents.
O’Neil TMT Weekly
Software (IGV): The software benchmark bounced 5% on below average volume after declining in the prior three
consecutive weeks. The IGV is testing 50-DMA resistance ($289), followed by its 100-DMA ($294) and price resistance at
$300. Despite the bounce, its technical profile remains weak, with RS line near a 52-week low, an RS Rating of 38, and
an A/D Rating of D+. Industry group performance remains weak with seven of the 11 software-related groups ranked
#100 or worse across the 197 O’Neil groups. We maintain a cautious outlook on the IGV and its software constituents.
Market View
The U.S. market is in a Confirmed Uptrend. The Nasdaq staged a day five follow-through on Thursday, gaining 2.7% in
higher day/day volume. The index regained both its 10-DMA (11,687) and 21-DMA (11,925) which will now act as nearterm downside support. The rolling 50-DMA (12,920) is now the next level of logical resistance. The S&P 500 rallied in
lower volume, but also regained its 10-DMA (4,024) and 21-DMA (4,066), with the 50-DMA (4,277) now also the next level
of resistance.
Eight of 11 sectors gained 5% or more this week, led by Energy, Retail and Consumer Cyclical, which gained 7-8%.
Energy continues to push further into highs and is now trading ~30% above its 200-DMA which is the biggest extension
since June 2021. Technology gained ~6%, clearing above its 10- and 21-DMA with the 50-DMA now trading ~6% above
current levels. Energy and Utility are still the only sectors trading above both the 50- and 200-DMA. The best performing
industry groups this week included Consumer Electronics, Department Stores, Discount Retail, Specialty Retail, Lodging,
Oil & Gas, Solar, Semiconductors and Banks. The worst performing groups included TV Media, Biotech, Pharma,
Outpatient Care, Generic Drugs, Agriculture, Mining, Staffing, Water Utilities, and Internet.
Global Laggards
Highlighted Charts
U.S.: Allegheny Technologies (ATI), Eastman Chemical Co. (EMN), Kratos Def & Sec Sol Inc (KTOS), Oshkosh Corporation (OSK), World Wrestling Entertainment (WWE), Omnicom Group (OMC), Chegg Inc (CHGG), Norwegian Cruise Line Holdings (NCLH), Carnival Corporation (CCL), UTZ Brands (UTZ), Arcosa (ACA), Texas Capital Bancshares (TCBI), Repay Holdings (RPAY), CareDx (CDNA), Urban Outfitters (URBN), Cree (CREE), Ultra Clean Holdings (UCTT), Take-two Interactive Software (TTWO).
Developed: FLSmidth and Co. (FLB.DK; FLS DC), Vonovia (VNAX.DE; VNA GR), ITV (ITV.GB; ITV LN), Accor (AC.FR; AC FP), Hengan International Group (HENG.HK;1044 HK), Crescent Point Energy (CPG.CA; CPG CN), JCR Pharmaceuticals (JCRE.JP; 4552 JP), WH Smith (SMWH.GB; SMWH LN), Ericsson (SL@G.SE; ERICB SS), Nihon Unisys (NHUN.JP; 8056 JP), Jet2 (JET2.GB; JET2 LN).
Emerging: Carabao Group (CAG.TH; CBG TB), Cosan Industria E Commercio On (COS.BR; CSAN3 BZ), Hon Hai Precision Industry (HON.TW; 2317 TT).
Global Laggards
Highlighted Charts
U.S.: Huntsman (HUN), Trinity Industries (TRN), World Wrestling Entertainment (WWE), Viacom CBS (VIAC), Wolverine World Wide (WWW), Huazhu (HTHT), Clorox (CLX), TPI Composites (TPIC), Old National Bancorp (ONB), Healthcare Services (HCSG), US Food (USFD), Interdigital (IDCC), Take-Two Interactive (TTWO), Copa (CPA).
