You've heard it. I've heard it. And honestly, I think there's something to it. Not because of any grand macro theory. Just because most people are away. Having fun in the sun. Holidays in the UK, vacations in the US. The volume dries up, the moves get choppy, and the serious money isn't really paying attention.

I myself went to Scarborough. Just me and the kids, having a proper adventure up on the Yorkshire coast. My plan — and I say plan loosely — was to take the laptop, get some content done while the kids ran riot. Didn't quite work out that way. Network connection was awful. Spent more time searching for a decent signal than actually doing anything useful. Maybe it's time I signed up to Starlink.

But you know what? I'm not complaining. Waterparks, kayaking, bike riding, museums, the funfair — we had a brilliant week. That stuff matters more than any chart.

The problem with switching off, though — and any trader will tell you this — is what you come back to. A few of my watchlist names had broken through some important levels while I was eating fish and chips on the seafront. Moves I'd been waiting on. Gone.

And here's the thing. A few years ago that would have genuinely ruined my mood. I'd have been sat there in Scarborough checking my phone every ten minutes, half-present with the kids, half-watching a ticker. Gone are those days. I've learned — slowly, sometimes painfully — not to get too down about missing moves. There's always another sector. Always another stock. Always another setup forming somewhere.

This time it was software.

The Sector

Software got absolutely battered. We're talking names down thirty, forty, fifty percent from their highs. The kind of drawdowns that make retail traders panic-sell and institutional money quietly accumulate. The kind of damage that takes months to repair.

And that's exactly what's been happening. Months of quiet base-building while everyone was busy writing the sector's obituary.

Now it's starting to move.

The S&P Software ETF chart tells the story clearly.

A massive base formed between roughly fifteen-and-a-half thousand and sixteen-and-a-half thousand points. Months of coiling. Then a clean breakout with volume. The EMAs stacking back up bullishly for the first time in a long time.

I was in the ETF. Reduced my position by half at the recent highs — which I'm glad about because it ran hot fast, RSI pushing nearly eighty on the day chart. Now I'm watching for the pullback to the EMAs to add back. That's how this works. You don't chase. You wait for the market to come to you.

The Screening Process

I ran the top twenty software names by market cap through my framework. Fundamentals first — not to build a DCF model, I'll leave that to the fund managers. Just checking for danger. Extreme PE ratios, no earnings, structural decay. The stuff that means a stock is a trap, not an opportunity.

Then the charts. Because fundamentals tell you what to buy. Charts tell you when.

Half the list got binned immediately. HubSpot — down nearly sixty percent from the two-hundred day moving average, PE of a hundred and twenty-five. No. Snowflake — no earnings floor whatsoever, pure story stock. No. DocuSign — the market hasn't forgiven that COVID overshoot and it's been five years. Hard no.

SS&C Technologies looked interesting on paper. Cheap forward PE, RSI sitting right in my entry zone. Then I pulled the chart and it's been in a sustained downtrend for the better part of a year. Screener data lies sometimes. The chart doesn't.

What I was left with after cutting through the noise — four names.

The Four

The bellwether. When software recovers, this is usually where the money goes first. It's the name everyone knows, the one that gets on the news, the one retail traders pile into when sentiment turns.

Forward PE just under thirteen. PEG of one. That's not expensive for what it is.

The chart is recovering. Clean bounce off the lows, EMAs crossing bullishly. But it's still wrestling with the fifty EMA overhead. That's the hurdle. I want to see it clear that level convincingly before I'm interested. A pullback to the 20 Daily EMA — confirmation candle back up — that's my trigger.

This one surprised me a bit. MSFT isn't exactly an undiscovered gem, but the chart structure is genuinely good right now.

Long base. Months of accumulation between roughly $390 and $400. Breakout on volume. Now pulling back into the top of that base. RSI has cooled to the fifty-five to sixty range — right where you want it for an entry.

And the narrative is obvious. Copilot. Azure. The OpenAI partnership. Every retail trader knows the story. When software sentiment turns, this is one of the first names that gets bought. That crowd excitement is what I'm trading.

This is the higher energy play. More risk, more potential upside. The kind of name that moves fast when the crowd gets excited.

The base is textbook. Months of tight consolidation, then a breakout candle with proper volume. It's pulled back now into the top of the base — that's your opportunity zone. RSI cooling from seventy, EMAs stacking.

The AI productivity angle fuels this one. Workplace operating system, automation, the whole thing. It's the story retail traders understand and get behind.

This is my highest conviction chart of the four in terms of setup quality right now.

Entry zone on break higher of $100. Stop below the base around $80

Best chart of the lot, and super cheap, with director buying.

The base it built was immaculate. Tight, months-long, RSI grinding upward through the whole consolidation — that's the footprint of institutional accumulation if I've ever seen it. Then it broke out. Explosively. RSI hit nearly eighty-nine. Volume was massive.

That's the problem right now. It ran too hot, too fast. RSI of eighty-nine means you leave it alone until it cools. Chasing a move like that is how you get caught in a reversal.

The AI workflow automation narrative here is red hot. ServiceNow is right in the middle of that conversation. When this RSI resets to the fifty-five to sixty-five range and price pulls back — that's when I'm interested. Not before.

Patience on this one.

None of these are screaming buys today. The sector had a big run. It's digesting. That's fine — healthy even.

My job right now is to sit on my hands. Watch the RSIs cool. Wait for the confirmation candles. Not get pulled into chasing something that's already moved.

I've made that mistake before. Probably more times than I'd like to admit. You see a stock flying, you feel the FOMO creeping in, and before you know it you're buying the top of a move that's about to reverse on you. I deleted the trading apps off my phone specifically to stop that kind of impulsive behaviour.

The process is: define the entry. Define the stop. Wait. Execute only when the criteria are met.

Software is waking up. The setups are forming. I'll be ready when they trigger.

Not financial advice. Do your own research. I'm a trader documenting my journey, not a fund manager.