I was watching IBD's analysis of the IBM stock. At the time they made the video, the market had not yet had a follow-through day, but nevertheless, they wanted to analyze IBM to show that once the market turned, that IBM would be a good candidate for a purchase in a new bull market.
This is how Investor's Business Daily (http://www.investors.com) analyzed the stock:
IBM has had good earnings growth and sales acceleration in the past 3 quarters (not 25% per quarter, but more modest which is still good because it's a monster company.) As is characteristic of very large companies, because of the sheer volume traded every day, IBM's stock typically trades in a very tight trading range.
Over the past few months, IBM was finding support above the 10-week moving average. In May, IBM pulled into a base pattern (on heavy volume) as the general underlying market started to drop. Heavy volume indicates that institutional investors are investing in the stock (meaning that they trust the stock) -- this is a good sign, especially in a bear market as we were in until today. The kind of base that IBM has been forming has been a "cup and handle" base with a high handle (which is fine for a cup and handle formation.)
When the stock breaks out of its base, instead of exploding to the upside as a smaller entrepreneurial stock would do, because IBM is a large company, it will likely move into a slower, but steady uptrend.
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