Software industry

Monitor and predict the growth prospects and potential risks of the Software industry by examining the financial and macroeconomic factors affecting it and the latest Software news tracked by MacroVar. Sign Up Free to get notified instantly on the latest Software updates and get full access to MacroVar advanced analytics of Global Financial Markets, Economies and Financial Risk.

Click to explore the factors and the financial models used by MacroVar to analyze the Software industry trend, growth prospects and risks.

Software industry Markets

MarketSymbolLastMomTrendExhRSI1D%1W%1M%1Y%
US Software industryUS.SOFTWARE5310.36-0.50.251.0438638.10720.344.799.40.30564

Software industry News

Software industry Analysis

MacroVar monitors the performance, risk, trend and momentum of the Software industry by examining the stock and credit performance of major Software companies across the US, Europe, Eastern Europe and Asia Pacific. Software Stock performance is monitored by analyzing STOXX equity indices of major Software companies while Software credit performance is monitored by analyzing Markit iBoxx credit indices reflecting the performance of the Software high yield corporate bond market.

MacroVar also monitors fundamental indicators closely linked to the Software sector published monthly including analysis of sector specific PMI indicators, components of Manufacturing & Services PMI and Economic Sentiment Indicators analysis.

MacroVar also monitors other factors closely related to the Software industry like closely related financial markets or macroeconmic indicators.

MacroVar estimates the following signals:: Software momentum, Software trend, Software oscillator, Software RSI and Software returns.

Software industry Description

The subsector of Software includes Publishers and distributors of computer software for home or corporate use. Excludes computer game producers, which are classified under Toys.

Software industry Momentum

Momentum is used to capture moves in shorter timeframes than trends. Momentum is the relative change occurring in markets. Relative change is different to a trend. A long-term trend can be up but the short-term momentum of a specific market can be 0. If a market moves down and then moves up and then moves back down the net relative change in price is 0. That means momentum is 0. A short-term positive momentum, with a long-term downtrend results in markets with no momentum.

MacroVar Software momentum signal ranges from -100 to +100. The Software momentum signal is derived as the mean value from 4 calculations for the Software . The timeframes monitored are the following: 1 Day (1 trading day), 1 Week (5 trading days), 1 Month (20 trading days), 3 Months (60 trading days)
For each timeframe, the following calculations are performed: 1. Software return is calculated for the specific timeframe and 2. if the return calculated is higher than 0, signal value output is 1 else signal value is -1. Software momentum signal is the aggregate of the the 4 values. A technical momentum rollover is identified when Software momentum signal moves from positive to negative value or vice-versa.

Software industry trend

Software trend signal ranges from -100 to +100. Software trend indicator is the mean value of the 8 calculations described below. The timeframes monitored are the following: 1-month (20 trading days), 3-months (60 trading days), 6-months (125 trading days), 1-year (250 trading days)
For each timeframe, the following calculations are performed: 1. Software Closing price vs Software moving average (MA) calculation: If Software is greater than Software MA value is +1, else -1, 2. Software Moving average slope calculation: if current Software moving average is higher than the previous MA, Software upward slope +1, else -1
Software trend model can be used as a trend strength indicator. Software trend strength values ranging between +75 and +100 or -75 and -100 show strong trend strength.
A technical trend rollover is identified when Software trend strength indicator moves from positive to negative value or vice-versa.

The most important trend indicator
The Software 52-week simple moving average and its slope are the most important indicators defining a market’s trend. Software is in an uptrend when Software price is higher than the 52-week moving average and the Software 52-week moving average has an upward slope. If fundamentals of the market have not changed and the moving average slope is still in uptrend, a price drop signifies a market correction and not a change of trend. Traders should watch oscillators like the Software oscillator and Software RSI to buy the dip and still follow the trend. The moving average slope turn signifies a change of trend.

Software industry oscillator

The Software oscillator estimated by MacroVar is the z-score of the currentSoftware price versus Software 1-year simple moving average price. The formula for the Software oscillator is:
Software oscillator = (Current Price – 250 trading days Software simple moving average price) / (250 days Software price standard deviation)

Software oversold conditions
Software is oversold when it is subject to a persistent downward pressure due to extreme fund outflows. When the Software is oversold it is often due for a rebound. Values of the Software oscillator lower than -2.5 signify oversold conditions. It must be noted that the Software oscillator must be analyzed ibn conjunction with the rest ofSoftware quantitative factors. Traders should pay less attention to overbought or oversold conditions during strong trends. They should pay close attention during counter trends and all combined with the Software RSI.
Software overbought conditions
Software is overbought when it is subject to a persistent upward pressure due to extreme fund inflows. When the Software is overbought it is often due for a correction. Values of the Software oscillator higher than +2.5 signify overbought conditions. It must be noted that the MacroVar oscillator must be compared to the rest of the Software quantitative factors. Traders should pay less attention to overbought or oversold conditions during strong trends. They should pay close attention during counter trends and all combined with the RSI.

Software RSI indicator

The RSI indicator measures the speed and change of price movements. The RSI indicator oscillates between 0 and 100. RSI is a useful indicator during normal trending market conditions when an asset price oscillates around its trend value. During big moves and strong trends however, like short squeezes or price spikes RSI and other oscillators don’t work.
During normal trend market conditions and when Software is in a downtrend RSI values between 50-60 signify overbought conditions before the downtrend is ready to resume. DuringSoftware uptrend, RSI values of 40 to 50 signify oversold conditions before the uptrend is ready to resume. It is strongly not recommended to enter a position when the RSI is “overbought” and falling or vice versa.

Software industry returns

MacroVar calculates Software returns for the following timeframes: Daily, Weekly, Monthly, Yearly. The formula for calculating returns is:

Software returns = (Software Closing Price – Software Previous Price)/(Software Previous Price)
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