IBM Shares Testing Short-term Resistance Level – Feb 12, 2015

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IBM Shares Testing Short-term Resistance Level - Feb 12, 2015

IBM Shares Testing Short-term Resistance Level - Feb 12, 2015

IBM shares might resume their selloff soon, as price appears to be finding difficulty breaking past the 50 simple moving average resistance. Take note that this has acted as a dynamic inflection point in the past and may continue to keep gains in check.

If IBM shares retreat, price could fall back to the previous lows near the $150/share level. MACD is almost in the overbought region, indicating that sellers could push the stock back down towards the near-term support. RSI is still moving up though, which means that further gains are still likely.

IBM Shares Outlook

Also, the short-term 50 SMA is still treading below the longer-term 200 SMA, confirming that the downtrend is still intact and that the path of least resistance is to the downside. However, should an upside break occur past the 50 SMA and $160/share level, price could climb up to the next resistance at around $165/share or until the 200 SMA at $175/share.

Risk sentiment has been volatile in the past days, as data from the US economy has supported a positive outlook for equities while the global news seems to be keeping further stock gains limited. The US just printed a stronger than expected NFP reading for January, suggesting that consumer confidence and sentiment might keep demand strong in the coming months.

Meanwhile, talks regarding the Greek debt deal haven’t panned out so well, leading to an overall downturn in risk-taking, even including US equities and IBM shares. Depending on the outcome of their negotiations this week, stock prices might also be dragged along on overall market sentiment.

As for the company itself, IBM has announced a settlement on the lawsuit against its manufacturing plant Endicott after a toxic spill. This could keep weighing on the stock price for the time being, although a rebound is possible if the issue is already over.

To contact the reporter of the story: Jonathan Millet at john@forexminute.com