Trades were hard to come by this week as markets have been raging and going up constantly. I thought we would get a nice pullback today, but it was hardly anything. Regardless, we were able to get in on at least our 2nd post-earnings trade. (BLK was the previous one) IBM disappointed Wall Street with a revenue miss in its AI and Cloud division which their CEO has been touting as the next big thing. This is my personal opinion but this level of an extreme reaction is a little uncalled for. Leaving my opinion aside, let us look at the technicals. Look at that red candle today. If it was a massive red candle filled from top to bottom, I would have waited a couple more days to see how this shapes up, but the fact that seller’s lost some control during the day as seen by the shrinking candle is a positive clue. In addition to that there is support at 115 and around 110 levels. If Nasdaq pulls back next week for some reason, that could take IBM down to next support of 110 which will give more buying opportunities if you missed today’s trade. But if markets stay the way they are, it appears the stock is going to bounce from here. I have mentioned Candlesticks in this video: https://tradingextremes.com/technical-analysis-3-support-resistance-post-earnings-trades/ But there are many videos on youtube which can explain you how to properly make sense of a Candle.

Not much to say here. Look at the chart, IBM just took off in our direction right after putting on this trade. We were able to close this trade for our full profit target with 17 days still remaining in the expiration cycle!