In my Oct. 20 review of International Business Machines (IBM) I wrote, "I have no doubt other technical analysts will start to warm up to the long side of IBM, but I remain bearish until a base pattern appears." Here at the end of November I must admit I underestimated the strength that was possible in Big Blue, so let's visit the charts of IBM again.
In this daily bar chart of IBM, below, we can see that prices soared and soared from late October and broke out over the highs of June. Impressive. Trading volume shows a slight improvement in the past two months. The slopes of the 50-day and 200-day moving averages are positive. The On-Balance-Volume (OBV) line shows a rise from July. The trend-following Moving Average Convergence Divergence (MACD) oscillator is well above the zero line but has crossed to the downside for a take profit sell signal.
In this weekly Japanese candlestick chart of IBM, below, we can see that prices broke out over the highs of 2022 and 2021. The highs of 2020 have not been broken, but I do not see them as important resistance. The slope of the 40-week moving average has turned positive. The weekly OBV line shows improvement the past two months but it has not broken above its respective highs. The weekly MACD oscillator is bullish.
In this monthly close-only chart of IBM, below, we can see the price history back to the mid-1980s. Look at the price action from the peak in 2013 -- prices have broken a downtrend from 2013 (trend line not drawn). The longer a trend is in force, the more you should pay attention when it is broken.
In this daily Point and Figure chart of IBM, below, we can see the upside breakout and a price target in the $186 area.
In this second Point and Figure chart of IBM, below, we see the software is projecting a price target in the $220 area.
Bottom line strategy: Has the IBM train left the station? A little bit. Traders should be patient buyers and see if we can get a dip or pullback into the $145/$140 area so we can risk to $135.
