{"id":26630,"date":"2026-03-25T07:30:00","date_gmt":"2026-03-25T11:30:00","guid":{"rendered":"https:\/\/jeffclarktrader.com\/market-minute\/?p=26630"},"modified":"2026-03-24T11:43:06","modified_gmt":"2026-03-24T15:43:06","slug":"the-setup-behind-the-next-software-rally","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-setup-behind-the-next-software-rally\/","title":{"rendered":"The Setup Behind the Next Software Rally"},"content":{"rendered":"\n

The software sector is setting up for another rally. <\/p>\n\n\n\n

Our previous trade in the iShares Expanded Tech Software Fund (IGV) yielded a double-digit return in just five weeks. And, when we exited the trade last week on March 18<\/strong><\/a>, I suspected the software sector was due for a few weeks of consolidating or downside action. <\/p>\n\n\n\n

But, I\u2019ve changed my mind. <\/p>\n\n\n\n

The pullback in IGV over the past week has been harsh. It has relieved the modestly overbought conditions in the sector, and it has set up a potentially bullish pattern on the chart. <\/p>\n\n\n\n

Take a look\u2026 <\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

It looks to me like the chart is setting up an \u201cinverted head and shoulders\u201d pattern. <\/p>\n\n\n\n

This is a bullish setup, which indicates the reversal from bearish trend to a bullish one. The pattern forms as the stock makes a lower-low with positive divergence on the momentum indicators \u2013 as IGV did in February. Then, following a sharp rally, the stock drops back down to form a \u201chigher low.\u201d <\/p>\n\n\n\n

You can see how the right shoulder on the chart is approaching the $80 level at which the left shoulder formed back in early February. If this is indeed the correct pattern, then IGV should bottom near this level and reverse soon. <\/p>\n\n\n\n

IGV will then need to breakout above the \u201cneckline\u201d of the pattern \u2013 the red dashed line at about $85. That sort of action will confirm the new rally phase, and the software sector will likely be headed higher over the next few weeks. <\/p>\n\n\n\n

The upside target of this pattern is the distance from the \u201chead\u201d \u2013 at $77.50 per share – and the \u201cneckline\u201d \u2013 at $85. That\u2019s 7.50 points. So, we add that to the neckline ($85) and get an upside target of $92.50. <\/p>\n\n\n\n

The downside risk is a potential move to a new low below $77.50. <\/p>\n\n\n\n

So, from a risk\/reward perspective, buying IGV here near $81 gives us $3.50 per share of risk versus $11.50 per share of potential reward. <\/p>\n\n\n\n

That looks like a good setup to me.\u00a0<\/p>\n\n\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
Editor, Market Minute<\/em><\/p>","protected":false},"excerpt":{"rendered":"

A recent pullback may be quietly setting the stage for the next software sector rally\u2026<\/p>\n","protected":false},"author":159,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-26630","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/159"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=26630"}],"version-history":[{"count":4,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26630\/revisions"}],"predecessor-version":[{"id":26648,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/26630\/revisions\/26648"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=26630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=26630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=26630"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=26630"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=26630"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=26630"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=26630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}