Hated Software Starts To Squeeze — And Nobody Owns It
Hated. Starting to move
Software is pushing again, and this is exactly the type of setup that tends to catch people wrong-footed. Positioning is light, sentiment is poor, but price is improving. That combination rarely resolves quietly.
It's back
IGV has now fully reversed the April 23 gap lower. We broke the short-term downtrend yesterday, but we remain inside the broader range. The 100-day MA sits just above, a close through that level opens the door to a squeeze that could catch many offside. The 200-day comes in near $100.
In a hated space like this, moves can get fast.
Source: LSEG Workspace
We have seen this before
Aggressively sold software doesn’t grind higher, it squeezes. And when it flips, it usually moves faster than most expect.
Source: LSEG Workspace
Chasing laggards
The bid in IGV and BTC suggests money is starting to rotate into laggard themes. That’s usually how these moves begin — slowly, then all at once.
Source: LSEG Workspace
Laggard leading
Software is leading again, building on Friday’s momentum. OpenAI-linked names like ORCL continue to rebound strongly following last week’s WSJ article.
Long-only demand remains absent, while hedge funds are still pressing shorts into strength, similar to Friday (JPM TMT desk).
That’s the setup: price rising, positioning still leaning the wrong way. That’s where squeezes start.
Hated
Software positioning has collapsed. Nothing new, but even a small mean reversion versus semis could drive a meaningful move.
Source: MS
Software options
We like expressing these compressed setups via options. You define the risk upfront and avoid getting shaken out.
We would express the squeeze through short-dated convexity. The IGV May 90/98 call spread offers ~5.5x max payoff.
When positioning is this light and price starts to move, you don’t need a catalyst, just a lack of sellers.
