This post was originally published on this site.
00:00 Speaker A
And you mentioned that um, the 7,000 level is contingent on those tech stocks coming back, right? Because even though we’ve had this big rotation trade, the textile stocks still have a huge waiting. So, as you look at this week, do you think that 7,000 is achievable, likely?
00:24 Adam
I think it’s definitely achievable. The S&P’s really been towing an anchor here with the the tech space. It has not made a new high since October and the big underpinning behind that has been weakness in software. There’s been this AI disruption trade that’s really kind of taken out the AI bubble talk and software names have absolutely been destroyed over the last several weeks with extremely oversold conditions. Some that we’ve never seen in terms of the momentum indicators that we watch. So, it’s not surprising we’re getting a bounce here when you look at the broader software industry. It’s right at a major support level. It’s extremely oversold. That’s what we witnessed last Friday. The big question though is that sustain sustainable and is that enough to to hold or really push the tech setter tech sector out of its consolidation range. I think maybe we’ll get some information on that this week, but certainly uh maybe a high risk, high reward setup here for the broader software space.
01:21 Speaker A
Adam, I’m I’m curious about something. I’ve been talking with a lot of guests about single stock volatility and how it has gone up by so much. I mean, even this morning, you look at some of the single stock movers on the back of earnings and you see extra well, at one time, it would have been extraordinary moves. Now, it’s kind of the norm to see these like 20% swings in a single stock. What does that do to technical analysis? Does it change things at all for you, especially when you’re looking at the index level? Do you have to tweak things when you see those kinds of moves?
01:58 Adam
I think it’s some job security for technicians because when there’s volatility, that’s when your phone is ringing the most and and that’s when investors want answers. Where’s support, where’s resistance, or what are the levels I need to be watching? Even if they don’t subscribe to the the field of technical analysis. So I would say in my experience doing it, any volatility tends to put more weight on technicals because price is really deviating from fundamentals and that’s where you have more emotion in the market and that’s where technicals I think work really well. So I I think it it certainly it helps in those scenarios.