Feb 16

SWH Under Pressure

by Mike Paulenoff, Fri February 16th, 2007

With Microsoft under pressure lately, and today in particular, coupled with the fact that it represents nearly 1/4 of the Software HLDRs (Amex: SWH), we should not be surprised by the weakness in that ETF today. Let's also notice that despite this week's strength in the SWH on Tuesday and Wednesday, the decline off of the January 11 high continues to exhibit a series of "lower-highs" and lower-lows within a developing down-trend.

However, in addition to the January-February decline, let's notice that all of the action since last October has carved out a very toppy-looking pattern, which is putting pressure on critical support at 39.20/00, which if violated and sustained should trigger downside acceleration towards a test of the 200-day moving average, now at 37.53.

Chart

Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!