Thursday Morning IBM

Gator's Chart of the Day: IBM

Tech has not been a bastion of strength lately and networkers have been a disaster.  (See FFIV, RVBD, LVLT, LLNW, etc.)  IBM is showing a bit of life.  Note that it has managed 3 green candles on increasing volume.  The news is positive as well as the board of directors approved a $5B buy back and they still have $6.7B left to purchase from the previous authorization.  That's more than 5% of the outstanding shares at Wednesday's closing price.  Analysts have a target price of 220.55 and the company has already reported earnings.

The Trade
With a little luck and patience an entry around 192 should be possible but even a little higher would be OK.  (I would be reluctant to pay 195.)   The stop would be a little under 190 (say 189.35ish) so the risk is about 2%.  The upside targets are 200 (add around 201) and then a continued push through the 20/50 day moving average confluence (final add) with the upper Bollinger band as the area to lighten up.  That should be around 212 which would be about 10% upside.  That gives an attractive risk:reward of 2:10 or 1:5.

Note: All statistics are from Finviz