During Thursday night's Lightning Round segment of Mad Money one caller asked host Jim Cramer about IBM (IBM) . "I like IBM. They're doing a good job. There will be growth after they split the company," Cramer replied.
Let's check out the charts and indicators of Big Blue.
When we reviewed IBM on April 26 we recommended that traders should "Stay long IBM. Raise sell stops to $135 from $131. $169 and then $201 are our new price objectives for now." So far so good.
In the daily bar chart of IBM, below, we can see that the stock has continued higher. Prices are above the rising 50-day moving average line and the rising 200-day line.
The daily On-Balance-Volume (OBV) line has shown improvement the past three months as traders have been more aggressive buyers. The Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in early March for a buy signal. A new buy signal can be seen now.
In the weekly Japanese candlestick chart of IBM, below, we can see that the shares have rallied toward the top end of a three-year consolidation pattern. A strong weekly close above $155 should be an important signal for further gains. The slope of the 40-week moving average line is positive.
The weekly OBV line shows strength from early 2020 and confirms the price gains. The MACD oscillator is in a bullish alignment above the zero line.
In this daily Point and Figure chart of IBM, we can see a potential upside price target of $207.
In this weekly close-only Point and Figure chart of IBM, below, we can see a lot of price history with our five-box reversal filter. Here the software is suggesting a price target in the $319 area. An entry at $158 should refresh the uptrend.
Bottom-line strategy: Traders should stay long IBM, raise stops to $142. Our nearest price target is $207 and the $319 target deserves some attention now.
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