It’s either a bounce or a break for IBM stock, as the price is currently hovering at a major area of interest as seen on the daily time frame. The price is testing the 200 SMA with MACD moving out of the oversold area, suggesting that a rally might be in the cards for IBM stock.
Take note though that price has broken below another support area, which is the 50 SMA and the short-term consolidation bottom around $187.50. Since then, IBM stock has pulled up for a quick retest before resuming its drop to $183.00. A break below the $182.00 levels or the 200 SMA could be a sign that a deeper selloff might take place.
RSI appears to be confirming the possibility of more losses for IBM stock, as it is still heading lower. This means that enough selling pressure is present to push the price to the next visible support zone at $180.00.
IBM Stock Outlook
Earlier this week, IBM announced that it is close to reaching a deal with Globalfoundries for chip-making. Note that Globalfoundries is interested in acquiring IBM’s intellectual property and act as a supplier of microprocessors.
Reaching a deal could be positive for IBM stock as it would allow the company to divest from a business that has developed process technology but was unable to deliver enough sales and profit from the manufacturing end. This particular chip-manufacturing business has been losing money for IBM and driving IBM stock lower, as losses amount to as much as $1.5 billion per year.
Any announcements regarding this deal could push IBM stock prices around, possibly between the 50 SMA and 200 SMA range. Strong gains could push the price up from the 50 SMA and until the previous highs just below the $200.00 mark.
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