Here’s the follow up on IBM ($IBM) – July 19, 2022


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I want to look at IBM ( NYSE: IBM ) here. Yesterday I had mentioned that after the stock really, really tanked that it was setting up a potentially good bullish snapback trade because it was so far below 3 standard deviations, which you can see by this line here. It is so far below 3 standard deviations that in instances like that it’s only a matter of time before they reverse.

It didn’t do that first thing this morning, you can guess this, it traded down. But then once it peaked, as far as downside pressure, then this just kind of started drifting higher. And then after 2:00, that’s when it moved with, shall we say, a little more decisiveness. But it took it a while longer to get going than some of these other ( NASDAQ: QQQ ) tech stocks.

So where are we now on IBM ( NYSE: IBM )? I still think that the stock will ultimately run higher here. Tomorrow, I had said if it is above 132.00 that would be your go point. And I will actually still say this, you can look at things this way. Look at $130.00 as the line in the sand. If this move is going to work, and I do believe that it will, if this move is going to work it shouldn’t fall below 130.00.

That is a super low risk. You can even keep your stop below today’s intraday low and you are risking less than 3 percent. That wouldn’t work for me because of the type of trade this is. The way this trade is structured, I’m looking at this as a snapback. And if I am correct then the stock will not move down over 2 percent the other way.

The only way the stock would move down to hit my stop is if I was wrong on the trade. Well, I don’t know why I would stick with the trade after I knew that it was going to be wrong. So I would just suggest keeping a tighter stop on this, but I like the setup for tomorrow.

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