Software stocks are turning around. The group could be a new leader in tech, says Katie Stockton

Software stocks are the latest beneficiaries of rotation within the technology sector. The renewed momentum behind heavyweights like Oracle (ORCL) and Microsoft (MSFT) is notable and suggests that leadership is spreading out after being concentrated in semiconductor stocks. The software sector is a new source of positive technical catalysts in both absolute and relative terms, suggesting the iShares Expanded Tech-Software Sector ETF (IGV) will build on its recent gains. After a severe six-month correction, IGV is long-term oversold per its monthly stochastics within the context of a secular bull trend, which is supported by the monthly cloud model. The stochastics have an upturn pending confirmation at the end of May, suggesting a long-term bottoming process is in place. Intermediate-term momentum has improved significantly for IGV per a new weekly MACD 'buy' signal, which supports upside follow-through in Q2. There is room to next major resistance at the weekly cloud model, near $97. IGV also has a positive intermediate-term catalyst relative to the S & P 500 Index (SPX). The ratio has dual counter-trend signals from the DeMARK Indicators® that suggest the trend of underperformance for IGV versus the SPX is overdone. IGV has already seen a positive reaction to these signals, which support at least a few more weeks of counter-trend outperformance. The daily chart of IGV is taking the shape of a bullish inverse head-and-shoulders reversal pattern. …