Summary
The strong get stronger and the weak get weaker — a cycle driven by momentum. While most of these discussions focus on high-momentum stocks chased by the masses, the other side of this phenomenon occurs when stocks are beaten down relentlessly despite oversold readings and valuations that fundamental analysts consider attractive. Unfortunately, being oversold or “cheap” is rarely by itself a sufficient reason to buy a stock, as evidenced by those currently attempting to catch a falling knife in the software and IT services industries. On Monday, the decline continued as the iShares Expanded Tech-Software ETF (IGV) dropped another 4.8%. The ETF has plummeted 35% since October 27, 2025, including a 24% drop in just 17 days between January 12 and February 5. This represents the worst 17-day stretch since the 2020 pandemic, the 2008 financial crisis, and the 2000-2002 technology meltdown. In early February, volume soared to 45 million shares for two consecutive days, surpassing the previous record by over 100%. While this initially appeared to be capitulation, heavy volume hit the IGV again following a brief rally and as prices reversed. Monday’s volume approached 40 million, indicating continu
