IBM

I don't have a position in IBM in the model portfolio, but I do have large cap coverage through XOM, BIDU, AAPL and CAT. IBM is one of the very few stocks that I would consider some very long dated puts to enhance gains as the Bet is pretty low, but otherwise, the set up looks good.

 The market trend has been to fill all gaps, again look at WMT's shakeout move and that was one gap that I thought would hold as a breakaway gap-the market filled it, so the first target is through resistance around $206 and then the gap at $208. With the volatility and the market's need to set some bull traps, a new high, either intraday or closing can't be ruled out, but these are the two areas I'm looking at if I decide to add IBM to the model portfolio. Other then sector diversification, I think I'd like to have some large-mid-small cap diversification.

 The 15 min 3C chart shows IBM's tendency to shoot up in these volatile head fake moves with heavy distribution followed by a gap down. The key is breaking through a resistance area as the last two distributed moves did. The short term accumulation for a mov in IBM was there several days ago and it has reacted to that, there's a negative divergence starting on the 15 min, I'd like to see higher prices with a better defined divergence, the last 2 negative divergences were unmistakable.

 A closer look at the head fake moves up that see heavy distribution and the accumulation area and price zone.

It is subtle, but there is a late day positive divergence in IBM, this is fairly significant on a 15 min chart so my target areas are not at all unreasonable.