The software sector is showing signs of a major tactical squeeze potential as extreme bearish sentiment and positioning meet a bullish technical 21/100-day crossover.
Key Takeaways
- 1.The software sector is primed for a significant tactical squeeze following a bullish technical crossover and potential breakout above the $94/$95 IGV level.
- 2.Market sentiment and positioning in software are at historic lows, with shorts at the 100th percentile and mutual fund exposure at 13-year lows.
- 3.Software valuations are currently trading significantly below their 5-year averages on both a trailing and growth-adjusted basis.
Table of Contents
- Double the software trouble
- Multiples below the 2021 extreme
- On a growth-adjusted basis
- Largest underweight in 13 years
- Shorts 100th percentile
- No PE activity
- Software PE deals decline sharply
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Authors
Author(s)
Securities
IGVMSFT
Themes
Short SqueezeSentiment ExtremesTechnical Breakouts
Regions
North AmericaUnited States