IBM: Stalls after testing long-term target zone

We have some interest in International Business Machines (IBM).

We continue to monitor IBM, which is at an important technical juncture after testing and stalling near a long-term upside objective in the 310–325 range. This target was derived from the 2012–2024 base breakout, and the lack of sustained follow-through at this level raises the need for a clearer directional signal.

This test of long-term resistance has coincided with a mid-to-late 2025 bearish divergence in IBM relative to the S&P 500 (SPX). While IBM has made higher highs on an absolute price basis, its relative performance versus the SPX has deteriorated, creating a potential overhang for the stock.

The mid-to-late 2025 cup-and-handle formation, highlighted in our October 31, 2025, blog post, has produced limited upside traction, likely constrained by this relative weakness. That said, price action since October suggests the potential development of an October 2025–early 2026 triangle consolidation.

We are awaiting a decisive breakout or breakdown to confirm this pattern. The rising 26- and 40-week moving averages point to an underlying upward trend, keeping the door open to a bullish continuation. A break above 312 would argue for renewed upside momentum and the potential for a move into the 330s.

Conversely, the unresolved bearish divergence versus the SPX remains a risk. A break below 289 would invalidate the bullish setup and raise the likelihood of a deeper retracement into the 260s.

Bottom line: IBM is consolidating after reaching a major long-term objective. Directional conviction requires confirmation, with 312 as upside confirmation and 289 as downside risk control.

Chart 1: International Business Machines (IBM) (top) and relative to the S&P 500 (bottom)

Chart 2: International Business Machines (IBM) (top) and relative to the S&P 500 (bottom)