International Business Machines (NYSE 🙂 is scheduled to release the stock market today after the market closes, for the fiscal quarter ending December 2019. Analysts predict earnings per share of $ 4.69 compared to $ 4 Posted 87 for the same quarter last year and sales of $ 21.64 billion, compared to $ 21.73 billion a year earlier.
The venerable tech giant's track record in revenue has been checked for many years: it saw 17 quarters of EPS beats, while sales were missing 11 times in the same period.
IBM has a lot to explain to shareholders: the stock has fallen by 12% in the last 5 years, while other major software companies such as Microsoft (NASDAQ 🙂 and Salesforce (NYSE 🙂 have added more than a stunning 200% of the value in the same time frame.
The company lovingly known as "Big Blue" survived in the new millennium, at a time when so many other older technology companies ended up on the mass grave, by focusing their main activity on creating software. However, the next hurdle for the colossus is cloud technology – and business customers seem to be bringing their cloud-related activities to Amazon (NASDAQ :), Alphabet (NASDAQ :), and Microsoft.
To get back into the race, IBM must either prove to the market that their cloud company is catching up or that it can offer a new vision.
Do investors believe that IBM will make it? They haven't decided yet.
On Friday, at the end of his session – a bullish show of violence – IBM closed over 200 DMA and reached the highest since November 6. The price closed for the second day above the dotted downward trend since August. 1 high. This, together with the closure above the 200 DMA, increased the chance of blowing out what could still be an annoying H&S top. The MACD and RSI, however, give credibility to an upward outbreak and turn the H&S top upside down.
Generally speaking, it is easy to see how the stock has overcome its 2000 bump on the road. Although it rose to $ 215 in March 2013, but has been unable to climb back since. It was steered in a downward trend and collapsed in the long-term uptrend line since 1993.
That line was never broken, with one exception: the infamous Christmas Eve of 2018, America's worst inventory history, when benchmarks were a hair's width away from a 20% correction, which would have been a formal bear market .
Even the crashes of 2000 and 2008 did not penetrate that otherwise impenetrable upward line. Given that the stock is expected to fall in the midst of today's global sale, IBM & # 39; s stock is likely to slip regardless of earnings.
If the results suggest that the company's cloud strategy still does not deliver the goods and has not been able to formulate a new, winning vision, we can expect the completed Q&G whose downside that will test again upside since 1993 , for the second time in two years.
Trading strategies – creation of short positions
Conservative traders must wait for a 3% penetration as a filter to prevent a bear market, and then wait for a withdrawal that proves resistance below the neckline.
Moderate traders can then wait for a return movement for better access shortly after the stock falls 2% below the neckline, not necessarily for evidence of trend.
Aggressive traders risk a short on a penetration of one percent. Then they could wait for a possible withdrawal for an entrance closer to resistance.
Trade sample
Admission: $ 132
Stop loss: $ 134
Risk: $ 2
Target: $ 126
Reward: $ 6
Risk: reward ratio: 1: 3
