Software 2023-07-13: +1 to "Stronger" strength rating (3rd strongest of 9 levels), previous move was also up
A strong week for Computer Software & Services as Application Stocks took off. The sub-industry was led by Riot Platforms which popped 50% in one week AFTER a nearly 300% YTD gain, and in total 35 Application Software stocks rose more than 10% for the trading week ending 7/13/23.
While there are no guaranteed methods for finding such stocks, if you aren't looking for these types of opportunities you certainly won't find them. More to my point on this site, strength can beget more strength, especially when the strength is also reflected at the sub-industry and industry levels. The strength can be more lasting if it is also shown at these two higher levels, along with the sector and market levels.
This momentum-based perspective is unpopular among the fundamental crowd, yet it is a truth reflected in the common saying "the market can stay irrational longer than you can stay solvent."
Perhaps this is the one time this has happened, and every other time a stock was up 300% in six months it imploded immediately thereafter. Though I doubt it.
Sure it would be ridiculous to presume more big gains after a huge gain, but no one realistically at the end of 2022 could have told you RIOT was headed for its YTD 2023 gains. After its first 100% gains (from its year-end 2022 close), who would have foreseen RIOT's additional 199 percentage points gain - to be followed by the +50% week it had last week? However unlikely, this is exactly what happened. And it was neither the first nor last time this will occur. So why not set up a program to look out for such opportunities? Why not use the market's irrationality (at times) to your advantage?
You won't find what you aren't looking for.
I'm not saying I would have bought RIOT at the beginning of the trading week, but the reality is that one could buy any stock at any time and still deploy sound risk management practices that limit overall portfolio damage in case of an individual position implosion. Look at the Six Questions in this post for more.
Application Software - a closer look (because of RIOT)
Stellar week for RIOT Platforms, Inc., up 50% - after being up 299% YTD up to the beginning of the trading week. The green in the graphic below reflects objective strength improvement in many of this sub-sector's stocks.
Leaders and Laggards
Current strongest and weakest stocks are shown below. These are of most interest as the downtrodden are prone to large (if perhaps temporary) pops while the strongest have been leading the charge for their sub-industries.
