International Business Machines Corp. (NYSE:IBM) HEFFX Highlights

International Business Machines Corp. (NYSE:IBM) HEFFX Highlights

International Business Machines Corp. (NYSE:IBM) HEFFX Highlights

International Business Machines Corp. (NYSE: IBM) has struggled for year to get out of what some analysts have called a value trap. However, Big Blue hasn’t made the headway it needs so far in 2017. As a result, one analyst is slashing its target for the computer giant and sees further downside for the stock.

Jefferies reiterated an Underperform rating for IBM, and lowered its price target to $125 from $135. The prior closing price was $153.19, so the price target cut implies downside of 18%.

The brokerage firm’s checks suggest that while IBM offers one of the more mature cognitive computing platforms today, the hefty services component of many artificial intelligence (AI) deployments will be a hindrance to adoption. At the same time, Jefferies also believes that IBM appears outgunned in the war for AI talent and likely will see increasing competition. Finally, its analysis suggests that the returns on IBM’s investments are unlikely to be above the cost of capital.

International Business Machines Corporation (IBM) is a technology company. The Company operates through five segments: Cognitive Solutions, Global Business Services (GBS), Technology Services & Cloud Platforms, Systems and Global Financing. The Cognitive Solutions segment delivers a spectrum of capabilities, from descriptive, predictive and prescriptive analytics to cognitive systems. Cognitive Solutions includes Watson, a cognitive computing platform that has the ability to interact in natural language, process big data, and learn from interactions with people and computers. The GBS segment provides clients with consulting, application management services and global process services. The Technology Services & Cloud Platforms segment provides information technology infrastructure services. The Systems segment provides clients with infrastructure technologies. The Global Financing segment includes client financing, commercial financing, and remanufacturing and remarketing.

Overall, the bias in prices is: Downwards.

Short term: Prices are stalling.

Intermediate term: Prices are ranging.

The projected upper bound is: 158.21.

The projected lower bound is: 151.22.

The projected closing price is: 154.71.

INTL BUS MACHINE closed up 1.100 at 154.800. Volume was 100% below average (consolidating) and Bollinger Bands were 66% narrower than normal.

Open           High            Low             Close           Volume
154.800      154.800      154.800      154.800      8

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish

Moving Averages: 10-period        50-period     200-period
Close:                       153.76              153.42           163.54
Volatility:                14                     14                    17
Volume:                   2,818,986      4,010,434      3,870,966

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

INTL BUS MACHINE gapped up today (bullish) on light volume. Possibility of a Common Gap which usually coincides with a lack of interest in the security. Common Gaps are fairly irrelevent for forecasting purposes. Four types of price gaps exist – Common, Breakaway, Runaway, and Exhaustion. Gaps acts as support/resistance.
INTL BUS MACHINE is currently 5.3% below its 200-period moving average and is in an downward trend. Volatility is relatively normal as compared to the average volatility over the last 10 periods. Our volume indicators reflect volume flowing into and out of IBM at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on IBM and have had this outlook for the last 2 periods.

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 63.0979. This is not an overbought or oversold reading. The last signal was a buy 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 53.09. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 37 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 60. This is not a topping or bottoming area. The last signal was a buy 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 5 period(s) ago.

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John Heffernan

John Heffernan is a Junior Analyst at HEFFX. John is studying Economics and is a contributor on equities at Live Trading News.

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