IBM...Not A Buy Yet
IBM (IBM - Get Report) is a true turnaround story as the stock is regaining technical momentum and offers a generous dividend. Buy IBM on weakness to its 200-day simple moving average at $133.75 and add to positions on weakness to its semiannual value level at $126.75.
The stock is one of the "Dogs of the Dow" for 2019 and is the cheapest Dow stock with a P/E ratio of 9.89 and a dividend yield of 4.81%, according to Macrotrends.
Cloud computing and artificial intelligence through IBM's Watson platform is the key to its turnaround story.
IBM's cloud computing is on modern mainframes not a farm of servers. In my opinion, this provides a more secure platform. This platform will be enhanced as the company integrates assets from its purchase of Red Hat (RHT - Get Report) , which has already been cleared by U.S. regulators. The combined entity is said to become the world's largest cloud technology company.
I believe Blockchain technology will revolutionize how we live, but will disrupt all business industries even more. For example, companies will a secure way of transacting with consumers directly, without a middle party, saving billions in the process. And one of the companies leading the charge is IBM with over 20 patents.
However, I would buy IBM yet, because IBM could go lower, before going higher because on the monthly chart, price has been making lower highs and lower lows.
So in order to consider when to buy IBM is when price starts breaking the downtrend lines on the weekly chart. The blue line represent the short term trend line and the yellow line represents the long term line. Thus, I would like to see price at least breach the red trend line which represents the medium term line.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
