Trade of the Day: International Business Machines (IBM)

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Today, we’re opening a new bearish trade on International Business Machines (NYSE:IBM). IBM has been on a roller coaster ride during the past few weeks. The stock surged higher after the company’s latest earnings announcement as traders got excited about the company’s AI prospects. However, that momentum seems to be fading.

IBM has pulled back from its highs around $162, and after consolidating for the past two weeks, or so, at $154, the stock has once again broken lower below $152. We expect that this fresh bearish break is going to lead the stock back down to support at $149 (the high point the stock reached in early October).

However, IBM has a confluence of both up-trending and horizontal support levels at $150. If the stock can break down through this level, we think IBM has a chance of falling all the way back down to $146 to completely fill the gap the stock formed after its recent earnings announcement. If the stock starts to bounce up off this current support level, it may be time to exit the trade.

‘Buy to open’ the IBM December 150 Puts (IBM171215P00150000) for a maximum price of $2.70.

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Article printed from InvestorPlace Media, https://investorplace.com/2017/11/trade-of-the-day-international-business-machines-ibm-2/.

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