SWH Under Pressure - Market Analysis for Feb 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.