Elementary my Dear Watson, Look at IBM

The broad market is correcting. The S&P 500 is down 4% in the last 5 days, The Russell 2000 over 7% and the Nasdaq is joining the move lower. So what am I doing? Watching for an entry into IBM, $IBM. It is the monthly chart below that has me keeping my eye on it. It has had a straight run higher in a great trend since breaking this 12 year channel. Prior to that it has rising for over 5

years. Symmetry suggests that this run could go until 2015. But everything is heading lower now. That is the good news. And the weekly chart below shows that pullback coincides with achieving the Measured Move higher comparable to the move from 65 to 130, up to the 205-210 area. A pullback or stall was in the cards. But the Simple Moving Averages (SMA) on this timeframe also show a

strong trend higher. A rest in the uptrend. It is the daily chart that gives an idea as to where to be ready to buy. Moving lower and off of an overbought Relative Strength Index(RSI) there are 4 spots to watch for support as potential buy points. First the 50 day SMA currently at 199.54. Next the area of previous support at 197. Third the top at 194 and finally the 100 day SMA at 192.29. The last is nearly a 10% pullback from the top. If it does not stop there I will likely be thinking about other things at the time.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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