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Thursday, March 14, 2013

$ibm, u bitch

Impressive move today.

If it holds on the weekly, and I think it will, its a break-out from a year long consolidation.

Given the very over bought position (short and long-term technicals), I was expecting some level of consolidation near 207 before the break out. (Not three days at pretty over-bought levels at 210.)

Not a fan of chasing. I am waiting for IBM to now re-test 207-210. Since its trading at highs, any trades I take on here will be relatively nibble, until a reasonable consolidation takes place.

A long held thesis of mine has been multiple expansion for IBM. Now that the SP500 is experiencing its own multiple expansion, IBM should also start to see its multiple approach pre-crisis multiples of 16-17 as the year progresses.

Basically I am expecting IBM to trade near 260 by the end of the year.

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