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IBM Blows Through $124.50 Late

July 16, 2008 10:48 PM

thumbsup.jpgI had posted in my updates on IBM,  that “normally I would say long IBM if $124.50 clears, but wasn’t sure how long the strength could last”. I expected it to “pop” once it cleared as shorts were very likely to cover. The key here was today’s open and low. It opened at $122.81. Therefore, once $124.50 cleared the odds of a new “problem” were very small. Therefore the probability of a big spike today was very high. I could not really comment on what was likely last night as it depended on the open, IMO. If it had opened above $124.50, I would have been FAR more skeptical. But the lower open and THEN clearing it gave the shorts reason for fear and they had to cover.

I commented long ago on IBM that we likely have never seen the high. There has never been a rejection of a high on IBM of any kind, IMO. The market weakness has drug it lower, nothing more. Obviously earnings will dicate the outcome here. Once again, aside from new, weakness should be bought on IBM as long as today’s high does not clear first. If we make any new highs, you have to be careful of a reversal. And, not to mention, chasing new highs is chasing. If you wanted to be long IBM, I have the call to be long it back on 07/02 or 07/03, I forget which, above $116.60.

Written by Tom@StockBlade.com · Filed Under IBM 

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