IBM Shaping Up as a Short
On IBM's (IBM) chart, we've seen a break in an uptrend line that's been in place for nearly two years. That has the stock poised for a potentially serious pullback. The weekly chart shows the stock moving out of a narrow channel consolidation in September 2010 as the 50-day moving average crossed above the 200-day line. At that point, the stock began a steady climb higher, reverting to the long-term average only briefly a year after the breakout, then entering a second rally phase toward the April 2012 high.
IBM (IBM) -- Weekly Source: StockCharts.com View Chart » View in New Window »The April-to-May pullback took IBM back below the 50-day moving average and saw the shares retest the uptrend line. The bounce in early June was unable to retake the 50-day line, and the price has now breached both the 200-day line and the long-term uptrend line. There were negative technical indications that accompanied the top: The relative-strength indicator moved below its 21-period signal average, and moving-average convergence/divergence made a bearish crossover. Overall volume had been declining during the second-half rally phase and, more recently, Chaikin money flow moved below its 21-period average, and is now nearing its centerline....207 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.
Already a Subscriber? Please login.
