IBM Impresses Investors

IBM has been roaring its way to new highs recently to levels not seen since 2000.  Let’s see the chart of this impressive stock, which has made new highs as the stock market indexes fell in 2008.  In fact, its lowest point this year was early January!

Price broke above what can be considered a pennant, flag, or triangle consolidation pattern.  Either way, it resolved into a continuation pattern, as price was supported by the rising 20 period moving average.  The resolution was quick and forceful to the upside, which occurred on very high relative volume.

Price is currently retracing part of its gains, but it wouldn’t surprise me to see price support about the $120 level.  Momentum on this swing was a little lighter than on the previous swing (hence the divergence) but price built a base from early March until now for making a new run higher.

Let’s pull it back to the weekly chart:

There is a lengthy upward sloping trendline, which has been tested both the upside and downside.

Price now sits just beneath that line after the recent large upward move.  Momentum also made a new weekly high, and again there could be strong support from prior highs about the $115 to $120 level.

In this environment, I’m sure the buyers are happy to see a technology stock performing so well.  Continue to watch this stock.