Time To Look at IBM Again

• Posted by Greg Harmon
• on March 24th, 2014

IBM, $IBM, was knocked back after its last earnings report, finding support at 172 where it has twice prior since October. Since then the stock has rebounded and filled the gap from January. If you missed that run then you are in luck. The daily chart shows it testing resistance with a breakout above targeting a Measured Move to 198. The Relative Strength Index (RSI) is a rising and the MACD about to cross up, both supporting the upside. But as we head into month end, a look at

the monthly chart suggest it might just be getting started. The same triple bottom is in red and if it reverses higher, like in that daily chart an AB=CD pattern kicks in. This targets a move to 318.40 by June 2018. It becomes more reliable as it breaks above the previous high at point B at 216. The momentum indicators are supportive on this timeframe as well with the RSI turning back higher and the MACD leveling at the prior low. Look for the short term trade to lead you into a longer term opportunity.

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