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Investors Suddenly Can't Own Enough Of IBM: A Technical Breakdown

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Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

International Business Machines Corp. (NYSE: IBM) shares were trading sharply higher by $6.22 (4 percent) at $171.58 in Thursday's session. The only relevant news out on the company is that it has opened a second cloud center in the Netherlands. The new facility has been created to meet the increased demand for cloud services in the region.

IBM, which had a muted reaction to Monday's Q1 EPS beat ($2.91 vs. $2.86 estimates), primarily due to its revenue miss ($19.59 billion vs. $19.86 billion estimates). Ahead of the report, it it cleared a major technical level ($165.50) that ended all rallies since late October 2014.

After flirting with that level over the last two days, it found support right off the open at $165.14, blasted to $171.61 and was trading right at the highs for the session.

From a technical perspective, it's difficult to identify any major resistance until the $180 level. The reason for that being it is now entering into a very thinly traded area that is gapped down from October after a disappointing Q3 earnings report.

Disclosure: The author is currently long shares of IBM.

Posted-In: Pre-market outlookTechnicals Intraday Update Movers Trading Ideas


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