IBM Surges on Latest Results: Here's What Could Happen Next
Are all upside price gaps as positive? Let's check out the charts of this former 'Top Pick.'
You've reached your free article limit
You've read 0 of 1 free Pro articles.
IBM IBM stock is trading higher Thursday after reporting increases in their software and infrastructure segments Wednesday night.
Let's check out the charts and indicators Thursday morning.
In the daily bar chart of IBM, below, I can see the climb higher for Big Blue. The shares are trading well above the rising 50-day moving average line and the rising 200-day line. I can't really see an increasing pattern of trading volume on this chart but I do see an upward trend for the On-Balance-Volume (OBV) line.
The Moving Average Convergence Divergence (MACD) oscillator turned upwards recently for a new outright buy signal but it is not likely to make a new high despite prices making new highs. I am anticipating a bearish divergence.
In the weekly Japanese candlestick chart of IBM, below, I see a mixed setup. The shares are certainly in an uptrend for much of the past year. IBM was one of my "Top Picks" for 2023 but I recommended taking profits and have sat out the latest part of the advance. The shares are still above the rising 40-week moving average line and I can see the weekly OBV line rising.
The MACD oscillator is positive too. The most recent weekly candle could be part of a top reversal pattern but it is too early to reach that conclusion.
In this daily Point and Figure chart of IBM, below, I can see that the shares have reached and exceeded a $173 price target.
In this weekly Point and Figure chart of IBM, below, I can see the same price target as the daily chart above.
Bottom-line strategy: My next door neighbor retired last month after 40 years with IBM. I hope he held onto his stock as I already jumped ship. IBM stock has made a number of upside price gaps on its travels higher. Some people see all upside price gaps as positive. When I see too many gaps I tend to think I am seeing an exhaustive move to the upside. IBM longs should be nimble and act accordingly.
Employees of TheStreet are prohibited from trading individual securities.