International Business Machines Corporation (NYSE: IBM) is our chart review of the day from CandlestickForum. IBM is forming a Rounded Bottom, and identifiable bullish price set up. It is based upon the formation being developed with indecisive candlestick signals, Doji’s, spinning tops, and hammer signals. The price cannot be decisively pushed back down through the T line, the eight exponential moving average. The indecisive trading, plus the slow buildup of investor sentiment, as a high probability prelude to a strong move to the upside.
In this case, positive trading above the last trading day, a hammer signal, would put price up into new trading area, usually causing a strong price move uninhibited by overhead. Stochastics are trying to curve back up. The next price move, a wave three action, should be the same magnitude as the price move of wave one from mid-January to the beginning of February.
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And what about when fundamental analysis meets technical analysis? We recently noted a street-high target of $230 for IBM from Stern Agee. If IBM is good enough for what is now a $12+ billion stake for Team Buffett at Berkshire Hathaway, it should be good enough for a chart review.
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