Tech-Software ETF Rebounds 15% but Hits Key 88 Fibonacci Resistance
iShares Expanded Tech-Software ETF rallied 15% from its February 23 low before stalling at the 88 resistance Fibonacci level this week. Adobe shares fell over 25% year-to-date following an earnings miss and surprise CEO succession, reinforcing investor skepticism that AI will drive new pricing power or margin expansion.
1. ETF Rebound and Resistance
The iShares Expanded Tech-Software Sector ETF rallied roughly 15% from its February 23 low before encountering stiff resistance near the 88 Fibonacci retracement level. This reversal suggests short sellers reloaded at a key technical barrier, preventing a sustained follow-through rally in software names.
2. Adobe Earnings and Leadership Change
Adobe's latest quarter fell short of expectations, and a surprise CEO succession announcement compounded investor disappointment. The stock remains down over 25% year-to-date, highlighting the challenge for even leading software providers to regain momentum.
3. AI Hype Facing Scrutiny
Investor skepticism about AI-driven revenue growth and margin expansion is growing as software firms tout product enhancements. Until companies demonstrate pricing power or new revenue streams linked to AI, multiples may remain under pressure.