Technical Earnings Preview: IBM has a potential bearish pattern
The stock has been in a consolidation phase for the last three months following a sharp decline in price. On a long-term monthly basis the price action from July of last year to present resembles an irregular bearish head and shoulders /bearish cup and handle pattern. A drop below $150 on negative news would see the pattern become active. Downside potential would be to the $120 area if the pattern became active and completed. Initial support would be at the 52-week low at $147.79, $142.36, and the $140 area. If the news is a positive surprise, a breakout above the right shoulder of the pattern at $157.50 or higher would void it. Next resistance levels to watch in that event as potential upside objectives would be at $158.85, $160, and $165.99.