IBM stock: fighting gravity

IBM stock: fighting gravity

2020-02-06 • Dikemaskini

In the meantime

While Tesla stock is in a recoil trying to get over $1000 per share, have a look at IBM. Recently, it broke through $153 (September-2018 resistance) after leaving the 200-MA below. Also, 50-MA is crossing 100-MA upwards, which is normally a reliable alert to prepare for buying, if the following trend confirms this signal. To evaluate this option well, let’s look at the long-term indications.

1.png

Are 8 years enough?

The below weekly chart is the zoomed-out version of the above one. The large downtrend marked above the price has been in place for the last 8 years, after the stock price reached the all-time high in 2012. Since then, it has been dropping, except for the years 2016-2017, which gave it notable upswing. Now, the price is testing the resistance of this downwards movement. May it brake it? There are preliminary signs for that, but time needs more to approve this move.

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Tactics

In the mid-term, the price is likely to bounce back from the reached resistance, regardless of its following move.

Hence, it may be advised to sell now, waiting for a lower level to buy. $130 per share may be a suitable level to look at in this scenario. Otherwise, the long-term support is at $110 serving as a checkpoint for the downtrend.

In the long-term, we need to look for uptrend confirmation. If the price continues the sideways movement it has been showing along 2019, that would be enough to state that it plans to conclude the large downtrend and is “thinking” to reverse it. If it goes “strongly” upwards and breaks the closest major resistances at $162, $169 and consequently $182, it will rid the 8-years-long gravitation power of bears. With this, we will be able to state that IBM stock has started a new decade on a serious bullish note.

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