Chart of the Day - Wednesday, October 9, 2024

Patrick Dunuwila
October 9, 2024

Chart of the Day


🏆  Today's Chart of the Day was shared by Alfonso De Pablos (@AlfCharts).
 

  • Software stocks ($IGV) have underperformed the broader Tech sector this year, but they’re setting up for a year-end rally. $IGV is resolving higher out of a three-year base within a solid primary uptrend.
     
  • $IGV closed at record highs for the second straight day after punching through resistance at $89 with authority. Price was rejected at this pivotal level twice this year, but the third time appears to be the charm. 
     
  • It's recovering from its third-worst drawdown (-45%). October has historically been the best month for $IGV, closing higher 71% of the time by an average of +3.7%. The top weights in $IGV are;

    9.4% - $CRM - Salesforce Inc.
    8.8% - $ORCL - Oracle Corp.
    7.9% - $MSFT - Microsoft Corp.
    7.2% - $NOW - ServiceNow, Inc.
    6.9% - $ADBE - Adobe Inc.
     

Takeaway: After two failed attempts this year, the Software ETF ($IGV) is violently breaking out of a three-year base. If it remains above $89, the risk is to the upside. 

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