BTIG Analyst Says Software Stocks Have Bottomed After 2026 Slump
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NEW YORK (AP) — A leading market technician has signaled that software stocks may have reached a bottom following a challenging start to 2026, citing technical indicators that suggest a potential rebound for the sector.
Jonathan Krinsky, chief market technician at BTIG, stated on Monday that the iShares Expanded Tech-Software ETF (IGV) has stabilized after a significant decline earlier in the year. Krinsky pointed to the ETF’s relative strength index (RSI) rebounding and trading above a key support level as evidence that selling pressure has eased.
The software sector faced headwinds in the first quarter of 2026, with many investors pulling back amid broader market uncertainty. However, Krinsky’s analysis suggests that the worst of the downturn may be behind the sector. The IGV, which tracks a broad range of technology software companies, has shown signs of recovery in recent trading sessions.
Krinsky’s assessment comes as investors seek clarity on whether the recent volatility marks a temporary correction or a more prolonged downturn. The technician noted that the RSI, a momentum indicator often used to identify overbought or oversold conditions, has moved out of oversold territory. This shift, combined with the ETF holding above a critical support level, indicates that buyers may be stepping back in.
The United States market has seen mixed performance across sectors in 2026, with technology stocks bearing the brunt of early-year declines. Software companies, in particular, faced pressure from rising interest rates and concerns over valuation. However, recent technical signals suggest that the sector may be poised for a turnaround.
Investors are watching closely to see if the rebound gains momentum. While Krinsky’s analysis points to a bottom forming, the broader market environment remains uncertain. Economic data releases and Federal Reserve policy decisions in the coming weeks could influence whether the software sector sustains its recovery or faces renewed selling pressure.
The IGV’s performance will be a key indicator for the sector’s health. If the ETF continues to trade above its support level and the RSI strengthens, it could signal a broader rally in software stocks. Conversely, a break below the support level could indicate that the decline is not yet over.
Market participants are awaiting further confirmation of the trend. Analysts will monitor trading volumes and price action in the coming days to determine if the technical signals hold. For now, the focus remains on whether the software sector can capitalize on the potential bottom and drive a sustained recovery in the second quarter of 2026.