As seen on its daily time frame, IBM stock has found resistance at the previous highs around the $195/share level and may be headed lower. MACD confirms the pickup in selling pressure as it just reached the overbought zone and started to head lower.
Moving averages are moving sideways, indicating that range-bound behavior might be seen in the next few weeks. The 50 SMA is still moving above the 200 SMA though, which means that there’s a chance for more gains for IBM stock.
Meanwhile, RSI is also moving lower, indicating that sellers are in control of price action for now. The indicator has just crossed below the 50.0 level, reflecting selling momentum.
IBM Stock Forecast
Further declines for IBM stock might last until the next visible support area at the $180/share level, which has held as a floor for selloffs in the past few months. A bounce off this support zone could lead to another rally to the top of the range at $195/share.
The nearby SMA could hold as near-term support though, as these typically act as dynamic inflection points for price action. In this case, IBM stock could bounce off the $186/share area then at $184/share.
For now, the company is working on selling its chip-making operations, offering Globalfoundries to takeover the unit. However, Globalfoundries is asking for a larger sum of $2 billion to accept the chip-making unit while IBM is offering only $1 billion.
IBM stock has been weighed down by years of falling revenue from this particular chip-making unit so if the sale fails to push through, expect further selling pressure on share prices. The unit loses about $1.5 billion per year for the company yet IBM’s CEO is striving to let go of this component in order to break nine consecutive quarters of falling revenue.
To contact the reporter of the story: Jonathan Millet at firstname.lastname@example.org