IBM's well oiled wheel could be about to drop off.
Just read this article on marketwatch.com/story/3-beaten-down-stocks-set-to-bounce-back-in-2015-2014-11-13?page=2
"IBM
• Sector: technology
• Market value: $160 billion
• 2014 return: -13%
While most large caps have risen from October’s slide, IBM has been left behind. That means a great buying opportunity for long-term investors.
IBM is one of those mega-cap tech stocks that have a place in almost every portfolio. For starters, there’s the 2.7% dividend yield and a history of payouts since 1916. There’s also the stability that comes with a company that does roughly $100 billion in annual sales and sports over $14 billion in cash and investments on its balance sheet."
Source full article : marketwatch.com/story/3-beaten-down-stocks-set-to-bounce-back-in-2015-2014-11-13?page=2
One could dig real deep and find all sorts of justifiable reasons why such reputable company should continue it's upward price trajectory in to indefinite future.
However, from the price history on this chart, I suspect that we have just completed a 5 wave cycle that could be also a larger 5 wave cycle that began from bottom of 1929-1932 Wall Street crash. See the chart of Dow as surrogate for the sector.
Even ignoring the price history before 1980, having completed 5 wave cycle, EW guidelines suggest price correcting to wave 4 low of one cycle degree lower. That suggest a ball park figure in the region of $70-50 area.
Is it the right time to buy this stock or many others like it. I think not. Rather wait for few more year and pick it up at bargain basement price may be $50 or lower.
Or better still consider long term far out of the money PUT Options and sit back.
As always do you own analysis. Select to follow me and the chart for any future updates or new charts. Share it freely with others you feel might benefit from this chart.
If you have specific alternative view and chart to share please feel fee to do so.
"IBM
• Sector: technology
• Market value: $160 billion
• 2014 return: -13%
While most large caps have risen from October’s slide, IBM has been left behind. That means a great buying opportunity for long-term investors.
IBM is one of those mega-cap tech stocks that have a place in almost every portfolio. For starters, there’s the 2.7% dividend yield and a history of payouts since 1916. There’s also the stability that comes with a company that does roughly $100 billion in annual sales and sports over $14 billion in cash and investments on its balance sheet."
Source full article : marketwatch.com/story/3-beaten-down-stocks-set-to-bounce-back-in-2015-2014-11-13?page=2
One could dig real deep and find all sorts of justifiable reasons why such reputable company should continue it's upward price trajectory in to indefinite future.
However, from the price history on this chart, I suspect that we have just completed a 5 wave cycle that could be also a larger 5 wave cycle that began from bottom of 1929-1932 Wall Street crash. See the chart of Dow as surrogate for the sector.
Even ignoring the price history before 1980, having completed 5 wave cycle, EW guidelines suggest price correcting to wave 4 low of one cycle degree lower. That suggest a ball park figure in the region of $70-50 area.
Is it the right time to buy this stock or many others like it. I think not. Rather wait for few more year and pick it up at bargain basement price may be $50 or lower.
Or better still consider long term far out of the money PUT Options and sit back.
As always do you own analysis. Select to follow me and the chart for any future updates or new charts. Share it freely with others you feel might benefit from this chart.
If you have specific alternative view and chart to share please feel fee to do so.
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