Software, one of the biggest parts of the stock market, is finally joining the market players. The iShares Expanded Technology Software ETF (IGV) is up more than 11% this week, reversing some of its steep losses this year. IGV is still down more than 21% in 2026 due to concerns that artificial intelligence will take market share away from software companies. This week’s rebound coincided with the S&P 500 returning to all-time highs. Paul Sciana, a technical strategist at Bank of America, said the move could signal that the company’s aggressive pitch to software providers is over for the time being. “We’re down ~37% from our September peak, and the fifth wave of declines may be over with holding levels in the mid-$70s and familiar support as prices attempt to reclaim the 200-week (simple moving average) of $81.78,” Sciana wrote to clients. “We don’t see a clear structural bottom pattern yet… but we see the potential for a head-and-shoulders base to form that will lead to a three-wave summer bull market.” IGV YTD Bar iShares Expanded Tech-Software ETF in 2026 Put another way, this may be the bottom for IGV, but it’s not the bottom. But Sciana said the worst may be over for some of the fund’s top holdings. Here’s what he had to say: Microsoft: The chart analyst said an “oversold recovery is underway” for Windows and XBox owners. Notable levels include $413, $431, and $454. Wednesday’s trading ended at $411. Oracle: “Oracle stock peaked near $343 in 2025 and has since fallen about 60%, with a low near $135. This decline appears to have completed a five-wave decline to the confluence of long-term support in the $130 range,” Ciana said. Palantir Technologies: Sciana said relative strength and other technical indicators support this view, and he is waiting for a “double bottom” to form around the $120 level. Palantir’s closing price on Wednesday was $142.15. Salesforce: CRM was the worst performer in the group, down nearly 33% year-to-date. However, Sciana said the stock has support around $160, adding that the bullish divergence in the Relative Strength Index (RSI) also suggests upside potential from the current stock price. Palo Alto Networks: PANW is down 11% this year, but has recently found support around $140, closing at $164.11 on Wednesday. “By holding support at these levels, PANW may be in the early stages of forming a foundation. Momentum signals are starting to improve, with the RSI rising, moving towards a (moving average convergence divergence) bullish crossover, and performance relative to the S&P 500 stabilizing,” Sciana said. BofA isn’t the only Wall Street shop seeing an upturn in software. Barclays’ trading desk said Thursday: “While overall sentiment towards software remains cautious, our conversations with trading desks and investors indicate that we have seen more high-quality large-cap names in recent days, particularly MSFT (hedge fund) coverage. “In the past few days, MSFT also appears to be benefiting from increased demand from investors for names leveraged in computing, which has lagged this year (as has ORCL).” It’s profitable, but we haven’t seen any flow or positive feedback from investors yet).
