There used to be a saying, "As IBM goes, so goes the market." Not too many people pay attention to America's long standing Blue Chip stock anymore. "Big Blue" as it used to be called just closed at a ten-year technical breakout high. Let me repeat: IBM has broken above its TEN YEAR high! From a historical and technical perspective we can expect the overall market to follow suit. This move appears even more impressive if we look at IBM's history over the past two years. The stock was trading at just around $75 in late 2008 and has now almost doubled!
Over the years it has been speculated that if someone wanted to manipulate the Dow Jones Index, they would buy or sell IBM as it holds alot of influence over the Dow index. Whether it is the Fed, speculators, or the market as a whole, Big Blue still retains much influence over this important index. Those who follow tech stocks should take note of this too.
Short term this is a good opportunity to take some profits in Big Blue, or play the put-side as there will probably be some pullback in this stock as options expiration approaches. But from a longer-term perspective, we can expect a general move higher.
Marketdoc has put positions in IBM.
Note: The above is for information purposes only. Any decision to buy, sell, or hold a specific investment should be reviewed by your own personal investment advisor.
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