International Business Machines Corporation (NYSE:IBM) – IBM Reaches Key Resistance Level And Looks Ready For A Breakout: Technical Analysis


International Business Machines Corp. (NYSE: IBM) shares are trading higher Tuesday after the company reported better-than-expected fourth-quarter EPS and sales results on Monday.

IBM reported quarterly earnings of $3.35 per share, which beat the analyst consensus estimate of $3.14. The company reported quarterly sales of $16.70 billion, which beat the analyst consensus estimate of $16.06 billion.

IBM was up 5.27% at $135.61 on Tuesday afternoon.

See Also: Why IBM Shares Are Rising

IBM Daily Chart Analysis

  • The stock has moved up to a resistance zone in what traders call an ascending triangle pattern. IBM has reached the $135 level, where it previously found resistance, while the higher low trendline has been an area where support has been found in the past.
  • The stock trades above both the 50-day moving average (green) and the 200-day moving average (blue), indicating the stock’s sentiment has been bullish. Each of these moving averages may hold as an area of support in the future.
  • The Relative Strength Index (RSI) has been falling since the new year, but over the past few days it has begun climbing and sits at 54. This shows that buyers have been moving back into the stock once again, and now there are more buyers than sellers.


What’s Next For IBM?

IBM has been trending higher over the past few months and making its way toward resistance in the ascending triangle pattern. The chart pattern shows that the stock may be able to break out above resistance in the future.

Bullish traders want to see the price cross above the $135 level and be able to consolidate above this level for the stock to possibly continue on its bullish run.

Bearish traders are looking to see the stock get rejected at the resistance level and start to fall back lower, cracking below the higher low trendline.

Photo: Courtesy of Dan Farber on Flickr


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