I last looked at IBM (IBM) back in October, when I wrote: "IBM has come off the mat, but it is not showing us much in the way of accumulation (buying). IBM could creep higher, but a retest of the August low is probably needed to give potential buyers confidence that the downtrend is over." Let's check what the charts and indicators are telling us now.
In this IBM daily chart, we can see that prices did pull back from late October to the middle of November, but stopped short of dropping to $145 -- or about $6 shy of retesting the stock's August low:
This pullback filled the gap, but didn't make a so-called "double bottom." Still, the market seemed happy with such a "retest," and IBM has continued to rebound from its November lows. The stock is now trading at around $169 -- above both a rising 50-day moving average (the yellow line in the chart at the top above) and a flattening 200-day average (the blue line in the chart at top).
IBM's daily On-Balance-Volume line (OBV) has also been mostly moving higher since October, with the stock's October/November price pullback producing only a minor decline. The Moving Average Convergence Divergence oscillator (MACD) is likewise above the zero line and in a bullish mode.
Now let's look at IBM's weekly bar chart, where price gaps disappear:
As you can see, IBM is currently above a flattening 40-week moving average line, while the weekly OBV line is also positive (albeit only slightly). Additionally, the weekly MACD oscillator has just crossed above the zero line for an outright "go long" signal.
Lastly, this Point and Figure chart shows IBM's trend without the gaps or small jiggles, and without volume:
On this chart, IBM only shows a little resistance from here to $176 or so. The chart above also projects a $205 potential price target.
Sill, IBM's daily chart looks extended, and the stock seems likely to trade back to nearby support levels of around $165. The bottom line: I want to buy IBM at some point, but I want the risk/reward ratio to be much more attractive. If I bought IBM at current levels, I would probably risk below $155 -- and that's just too rich for me.