Wall Street Is Massively Long Semis — And Massively Short Software
Software strikes back
Performance over the past 5 sessions. From the top: IGV, QQQ and SMH.
Source: LSEG Workspace
Remember software?
IGV has pushed above the short-term negative trend line and is now trading above the 21-day moving average. A close above the $86 area could open the door for a further squeeze. There is little resistance until the 50-day moving average around $94.
Source: LSEG Workspace
Volumes speak
We have seen very large volumes during the recent up days in IGV.
Source: LSEG Workspace
SOX
SOX is sitting on the larger trend line and the 50-day moving average. This is the short-term must-hold area. A close below here risks a move down to the 100-day (red) for starters.
Source: LSEG Workspace
Room to move
The IGV/SOX ratio is up from the panic lows, but zoom out and you realize this one could move much further. Positioning remains very one-sided in this pair, and the relative setup between software and semis is starting to look increasingly interesting.
Source: LSEG Workspace
Top of mind
From a global sector perspective, long exposure to Semis and Semi Equipment versus short exposure to Software and Services remains top of mind and a potential risk according to GS.
Source: GS
The big long
Semis remain a huge long.
Source: LSEG Workspace
The big short
The Software shorty is absolutely massive.
