Market Commentary

Software to the rescue

Not surprisingly, the Software Index (GSO.X) is the sector of the day, up 5.05%. But the Index looks to be losing some of its steam, and the Dow has actually dropped into negative territory.

GSTI Software Index Daily Chart

After managing to hold above 200, the Software Index has climbed back above a series of lows at 210 that has offered resistance over the past two days. The stochastic is saying the index is due for a bounce, but the 50-dma could offer some resistance, as well as the previous highs at 231. If those points of contention can be cleared, we can start to talk about 240 or 246. For now, GSO just needs to worry about closing above 210.

Adobe Systems Daily Chart

One of the software stocks that has held up well lately is Adobe Systems (NASD:ADBE), and it is benefiting today, up $2.53. Today's gap has pushed ADBE above the 50-dma, but now the recent downtrend looks to be putting up a fight. Of course the stock that started this little rally, Oracle, is up $2.02, and also above its recent downtrend. Siebel, Veritas, and Peoplesoft are also benefiting to the tune of $3 gains.
Jeffrey Canavan