One of my best recommendations for subscribers in the past few months was to pick up IBM Feb 150 Calls on Jan. 7. The trade returned 149% during the next 12 days, but the speed was deceiving. This idea was more than 10 years in the making.

As you can see in the chart below, IBM (NYSE: IBM) had set a high in 1999 that was not approached again until 2008.

Bulls were repelled there during the financial crisis, but made another attempt two years later in late 2009. They finally broke through in mid-2010, but shares consolidated for another 10 months before appreciating rapidly in September-October that year.

Shares of IBM then consolidated again for two months, which I considered to be a bullish continuation pattern since the lows did not exceed the late October breakout zone. I, therefore, instructed subscribers to buy the next breakout of this new consolidation. That occurred on Jan. 7. Shares began levitating immediately, rose into the company’s earnings release date, and then gapped higher after an upbeat report was received positively by the market.

Since we are traders, and not long-term holders, I recommended selling that 150% pop following a hold of not quite two weeks.

The main takeaway with the IBM trade is that new all-time highs after long consolidations are very bullish. Many new investors feel as if they have “missed the move” at the new high, but that is the wrong way to think about it. Very often it is just the start of an epic new journey, since at that point every single owner of the shares is a winner and, thus, there is no overhang of anxious sellers.

Lacking the overhang of sellers, shorter consolidations of one to three months are just rest stops for the shares, and they can be bought opportunistically on breakouts.