The software names have had a rough go of it lately, and that drama continued Friday. The industry group had another down day, kicking off Monday on a muted note.
The bigger picture picture that seems to be evolving is that tech not holding up its leadership role, as I mentioned in my ChartWatchers article over the weekend.
Sometimes it is difficult to keep track of the individual names if you haven't created a ChartList. On the weekend video, I demonstrated how to build a software industry group chartlist, how to sort it, delete stocks out of it, save it, alter it and create new sort orders. The beauty of having multiple chartlists is that it allows you to focus in on an industry level, rather than having a wall of broad data from the S&P 500 coming in and making it difficult to see where the market leadership is.
In the example above, software companies as a whole are making lower highs in relative strength and are now making lower lows as well. This new three-month low in relative strength (shown in purple) is an important clue towards overall technology health. This will be an important one to watch over the coming days.
If you would like to catch the video, you can follow this link.
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Greg Schnell, CMT, MFTA
Senior Technical Analyst, StockCharts.com
Author, Stock Charts For Dummies
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