International Business Machines (IBM)

A few subscribers are looking for an update on IBM, which we last featured in this blog on October 13th.

IBM achieves the target for its 2012-2024 big base at 310 and 325, but...

IBM's late 2024 breakout and retest from a 12-year big base targeted pattern counts at 310 and 325, a zone which IBM tested earlier this week. Rising 26- and 40-week moving averages (WMAs) near 269-161 continue to underpin this stock's bullish setup.

IBM has shown market leadership versus the S&P 500 (SPX) since late 2021, confirmed by a bullish shift to a rising trend on the relative price 200-WMA. However, we would like to see continued confirmation of leadership for IBM from additional new highs versus the S&P 500.

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

...a breakout from a bullish cup and handle counts IBM into the 350s

IBM has broken out from a bullish cup-and-handle formation that developed between late June and late October. Maintaining support in the 305 (61.8% extension) to 296 (breakout) zone would preserve this bullish setup, keeping the breakout intact. The pattern projects upside potential toward 331 (100% extension) and into the 350s (near 359) based on the measuring implications of the cup-and-handle formation. Rising daily moving averages continue to reinforce the stock’s constructive trend and positive momentum backdrop.

Chart 2: IBM breaks higher from a bullish cup and handle pattern