Software industry collapse down to very long-term uptrend
So far this year, the technology sector has clearly been the worst performer, and within it, the software industry has been hit the hardest. Losses in the SPDR S&P Software & Services ETF (XSW) are approaching 20%, putting to the test the very long-term upward trend that has guided the index for more than a decade.
State Street SPDR S&P Software & Services ETF weekly chart with volume and ATR%, extracted from TradingView on 16/02/26
Maximum stress and key earnings releases
The index’s approach to this technical level is happening at a point of maximum stress: volatility is at extreme levels and volume has surged. In similar situations, the industry has managed to form market bottoms. Will it happen again? Much of the answer lies in corporate earnings over the coming weeks.
Palo Alto Networks, Salesforce, Intuit, CrowdStrike, , and will report soon. They are doing so with historically attractive valuation multiples and significant upside potential relative to analysts’ consensus price targets.
