The above chart illustrates the tremendous run which IBM has had since hitting its low last November. We can see "Big Blue" is challenging its multi-year resistance levels around 130. This is one of my favorite stocks for which I am usually always bullish. However, this is a rare instance which I have to take a bearish stand on my favorite bellweather tech stock. As you can see, some of the technicals on IBM have started a downward trending slope, or are finishing a topping formation. I consider IBM to be a very "tradable" stock in that profits can be had in either bullish or bearish positions, provided you call it correctly. This is one of those few times I am trading the short side. I expect this stock to pull back to around the 111 level.
This is only one example of several stocks and indexes which I see a similar topping formation. Overall I am still bullish on the economic recovery. Fundamentally the recovery is picking up steam. And people who bought real estate over the past year are glad they did. But I can't ignore so many technical market indicators when they are obvious like this. I am just calling it as I see it without always being able to explain the "why" part. Don't be fooled by the market "experts" who are telling you this market will now move higher after missing the call for the past eight months! Now is a good time to book solid profits for 2009 and set up some puts on many of the indexes and individual stocks which have skyrocketed over this past year. Stay tuned. This could get interesting.
Note: The above is for information purposes only. Any decision to buy, sell, or hold a specific investment for a portfolio should be discussed with your own personal investment advisor.
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