IBM Follow Up

IBM was another late Wednesday night post among several stocks I was pointing out target areas, we've had some head winds and yesterday it looked like Wall Street had to ante up a little support to keep these stocks moving toward their likely targets as well.

I also mentioned IBM yesterday, I haven't taken any position there, but noted that because of the low Beta in IBM, there's a specific price target I had in mind to make up for the low Beta. Please remember if you short a stock with a dividend and are holding while it goes ex-dividend, YOU are responsible for the dividend-If the position looks good I don't usually car too much bout that unless there's a monster dividend and in that case I might exit the trade before it goes ex-divy-IBM's is 1.5% per year.

Even if you have no interest in IBM, what is worthwhile in monitoring the price action is that we are seeing the purpose of the move off the April 10th SPX lows being confirmed.

 IBM's volatility shakeout is on decreasing volume, the general idea is that traders are less and less willing to step up and buy IBM at these levels.
So far we have broken through the 2 levels I saw as essential for the purposes of the market bounce, the yellow small gap area is the price level in which I would consider IBM as a concession for the low Beta, the bigger the bull trap that is set, generally the harder and faster the stock falls, that's why a small move higher is important to me, it's not the extra buck or so, it's the extra bulls caught in the trap.

 The 5 min chart is doing what I'd expect and need to see, going negative in to higher prices and doing so with more momentum.

 I mentioned yesterday that IBM has these "Dog Tail" moves up that fail on big gaps down, we are now seeing one of the biggest dog tail moves in IBM, which is to be expected on increased volatility.

I have a trend Channel stop for this particular move, it is at the $205.50 area, a break of that should mean the end of this move. I don't know how helpful this will be as IBM's breaks though the Trend Channel usually are on gaps down, but it's still a level worth throwing a price alert on just in case there is that intraday move below the Channel.