Not Much Soft About It:
Sure the IGV is now trading 3% off its most recent 52-week highs this month, and it is important to remember that nothing goes up in a straight line. Below is the daily chart of the ETF and it broke above the very round 90 number on 10/8 and the vast majority of instruments that trade through 90 often go on to reach par and beyond. One has to be open-minded to a bigger drawdown, as we spoke about in our 10/21 Technology Note, but so far the fund is acting just how you would like to see if you are bullish on the space. In my opinion, it makes sense to see what names are weathering this nascent storm the best. There is a very good chance they will be the strongest out of the gate, once the uptrend resumes. Stocks that should be included in the conversation include APP, and any move back toward the lower 150s to retest the bull flag breakout, which carries a measured move to 175, should be bought. Notice almost 2 months of trading near a white-hot 80 RSI level. MSTR is another and any push toward the very round 200 number, the level of a WEEKLY cup base breakout, should be purchased.