Software (IGV) & Digital Infrastructure (IDGT) - Setups

We are in the “Autumn Fall” selling season right now, however we are noticing relative strength in Software (IGV) and Digital Infrastructure (IDGT). These groups could provide significant upside for patient investors with longer term time horizons.

Software (IGV):

Position: Long

Reasoning: IGV has relative strength to the greater market and has been in a sideways consolidation pattern for over 7 months. It is now above the 9, 21 & 50 EMAs on the daily and weekly charts, despite the market’s selloff. Additionally, RSI is above 50 and point up. The weekly chart (lower chart) appears to be making a Cup & Handle Pattern, which could provide significant upside.

Cycles: IGV could have a countertrend rally until 9/23, which short-term traders could profit from. The Cycles appear to bottom around 10/8, so longer term investors could build positions at this time.

Entry: A trade can be entered now. Investors can build a position after 10/8.

Stop-loss: Below the daily chart’s 21 EMA at $84.

Take profit: Traders could take profit below the previous high of $88.97. However the real money will be made if the Cup & Handle Patter plays out after 10/8, where the Cup & Handle Pattern’s target is $127. Profits can be protected by trailing the 21 EMA.

In the Premium Section (for Paid Members), we’ll take a look at the setup for Digital Infrastructure (IDGT). You can find our membership details in the image below.

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