Which Is More Important - Technical Pattern or Industry Strength?

I'm not sure I have the definitive answer, but I did find a stock that's facing this question right now.

Applovin Corp (APP) is one of the best software stocks ($DJUSSW) currently, as it's relative strength line has been soaring since mid-February. APP's AD line has also ripped higher, suggesting plenty of accumulation has taken place in the stock. But what do we make of the $DJUSSW:$SPX relative strength line tumbling during this same period of relative strength for APP?

Enter Applovin Corp (APP):

The technical price pattern is clearly bullish. A bullish continuation pattern - cup with handle - is halfway home as the right side of the cup has equaled the left side. My expectation would be for a handle to form, perhaps down to the rising 20-day EMA, currently at 72.40. That would represent approximately a 6-7% decline. Assuming that's the course that APP takes, where does it go from there? Will money rotating away from software ultimately crush this bullish continuation pattern, or will APP avoid the contagion of so many other software stocks and keep its own relative strength perfectly intact? There's no way to answer the question, but I can say one thing. If I'm going to take my chances on ANY long stock, I'd want it to be a leader - and APP is clearly a software leader right now.

Happy Trading! Tom Bowley Chief Market Strategist EarningsBeats.com Better Timing. Better Trades.