Chart of the week: Good odds of a big move here

TL;DR

IBM stock chart shows a potential renewed advance with a 5-wave up and 3-wave correction, but major resistance around 130 to 140 levels suggests a turn down from current levels.

Transcript

this is a chart of the week video for Monday the 11th of February and I'm covering today International Business Machines which is the granddaddy of the huge tech industry and I have a little anecdote in the chart of the week which I hope you find amusing and so here is the the monthly chart going back to 2000 and Beyond and it's it's this period he... Read More

Key Insights

• 😘 IBM had a challenging period in the hardware industry compared to software companies but staged a strong rally off the 2009 low.
• 👋 The chart indicates a potential renewed advance with a 5-wave up and a 3-wave correction pattern.
• 🎚️ Major resistance levels at 130 to 140 suggest a turn down from current levels, with a possible target of 110.
• 😘 Momentum divergence is a popular signal for identifying good low-risk trades.
• 😥 The Fibonacci 62% retracement level is often a turning point for the market.
• 😥 The chart shows the importance of prior pivot points as support and resistance levels.
• 💠 An overshoot followed by a reversal back inside the channel indicates a potential sharp reversal.

Questions & Answers

Q: What is the overall pattern on IBM's monthly chart from 2000 to the present?

The monthly chart shows a period of decline followed by a strong rally off the 2009 low, indicating a potential renewed advance.

Q: How can we identify a momentum divergence on the chart?

A momentum divergence occurs when wave C has a lower low than wave A, but the momentum is higher than at wave A, signaling a potential good low-risk trade.

Q: What is the significance of the Fibonacci 62% retracement level?

The Fibonacci 62% retracement level is a common turning point for the market. If the market is going to turn, it is likely to do so at this level.

Q: What are the major resistance levels on the chart?

The major resistance levels are around 130 to 140, which previously acted as support but now have become significant resistance after the breakdown.

Summary & Key Takeaways

• IBM stock had a period of decline from 2000 to 2009 but staged a strong rally off the 2009 low.

• The chart indicates a 5-wave up and a 3-wave correction, with the potential for a renewed advance.

• Major resistance levels at 130 to 140 suggest a turn down from current levels, with a possible target of 110.