IBM Earnings Mixed, Warns About Slowdown In Software Sales (Bearish)

Steve Miller

Last night, IBM NYSE: IBM reported first quarter earnings results.

The company reported adjusted earnings per share (EPS) of $1.84, which beat consensus estimates of $1.81.

Revenue came in at $17.57B, which missed forecasts of $17.7B. IBM withdrew their fiscal year 2020 guidance given the uncertainty surrounding COVID-19.

IBM noted that there was a sharp slowdown in software sales during late March. This raised concerns about the pending earnings results for the rest of the enterprise software industry. 

IBM traded down 6% midway through Tuesday’s trading session.

Given this background, let’s see what the charts tell us.

IBM (IBM) Weekly Chart

ibm stock price analysis bearish decline earnings outlook caution year 2020

At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.

askSlim Technical Briefing: The weekly cycle analysis suggests that IBM is in an intermediate-term rising phase in a longer-term negative pattern. Weekly momentum is positive.

ibm stock price technical indicators bearish investment outlook year 2020

On the upside, there is an intermediate-term resistance zone from 116.61 – 124.66.

On the downside, there is an intermediate-term support zone from 107.87 – 103.78. For the bulls to regain control of the intermediate-term, we would need to see a weekly close above 132.70.

askSlim Sum of the Evidence: IBM is in an intermediate-term rising phase in a negative longer-term pattern.

Under these conditions, we would expect IBM to fail in the intermediate-term resistance zone beginning at 116.61. There is a likelihood that the stock trades down to 104 by mid-June.

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