The iShares Expanded Tech-Software Sector ETF (IGV) (which I wrote about two months ago ) has had a huge run. Its nine-best performing holdings all are up at least 100% year-to-date, with three higher by more than 300% (PLTR, MSTR and APP). Those stocks now have become household names within the active trading community. And we can see why. Thus, while IGV (+30% YTD) has greatly benefited from a small group of stocks putting up otherworldly gains in 2024, the ETF holds a total of 117 stocks. That means a fair amount have underperformed. In fact, seventy names (or nearly 60% of IGV) have fared worse than the ETF this year. One of those is Cadence Design Systems (CDNS) , which is just +13% YTD. That makes it just the 55 th best IGV holding. By the numbers alone, then, this isn’t too encouraging. Running scans based solely on percentage moves tells us what a stock has done up to a certain point, but it does NOT tell us how its chart looks. The two can present very different scenarios sometimes. This is why we manually go through so many charts every day – to find the potential diamonds in the rough – the stocks that are quietly forming potential bullish set ups. CDNS is one of those. CDNS has had a tumultuous run in 2024 – since the start of the year, the stock has had SIX different multi-week advances of at least +15%. Again, with the stock up just 13% YTD, this means there also have been an equal amount of big multi-week declines along the way. From a short-term trading perspective, that clearly has provided both bullish and bearish mean-reverting opportunities within what’s become a sizable trading range. However, all of the acute moves and sharp reversals have frustrated those who have been looking for a breakout to new highs and a new up-leg. That may change soon. Through all of the twists and turns, CDNS has been building a potentially big bullish inverse head-and-shoulders pattern. It still has work to do, but if it can complete the pictured right shoulder relatively soon and break out to new highs, the measured move would be up near 417. Given the pattern’s large size and the resultant lofty target, this most likely will take some time to play out. But big bases like this should be on our radar screens again in 2025 – no matter the stock, industry group or sector. -Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
