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

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At 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.

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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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Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.