As a software engineer, your income depends on this sector, so you should not be investing in the sector. Diversification means you should have your investments in other unrelated sectors.
So should you short the sector which would be good diversification?
You would really need to know what you are doing. Given that 99.999% of investors don't beat the market, it's unlikely that you will be able to. If the market is overvalued but not in a bubble, that is not a good enough reason to short it. If a bubble develops, you will lose an awful lot of money. We are in a weird world of QE at the moment where prices are artificially high. But they may well stay artificially high for a very long time.
If you want to experiment with it, why not run a model portfolio first. If you decide that a share is overvalued, then pretend that you have shorted €10,000 worth of the shares. Do it for a year or so before committing any real money. Even after a year, if you are in profit, you won't know whether it is due to luck alone. But if you lose, you might see that the only way to make money from the stockmarket is to be a boring long term buy and hold investor.
Brendan