IBM Broke Support

Published on Tuesday, 09 February 2010 09:33 Written by Christopher Lynn

New York, Feb 9^th (TradersHuddle.com) - Shares of International Business Machines Corp. (NYSE:IBM) closed the trading session at $121.88 below calculated support at $121.9 breaking the stock technically, raising concerns by investors, as the move might trigger more selling.

International Business Machines Corporation (NYSE:IBM) provides computer solutions through the use of advanced information technology. The Company's solutions include technologies, systems, products, services, software, and financing. IBM offers its products globally through different distribution channels. Its Global Technology Services segment offers IT infrastructure and business process services. The company's Global Business Services segment provides professional services and application outsourcing services, including consulting and systems integration, and application management. IBM was founded in 1910 and is based in Armonk, NY.

IBM's stock was trading in a well defined range with support at $121.9 and resistance at $128.655; given that this range was broken traders will be closely monitoring the stock?s price action for clues of direction.

From a technical perspective it can be expected that previous support becomes resistance, as the new range gets defined, however, given that IBM's stock is still near the broken support, traders will be focusing on $121.9 to see if the stock can bounce back and return to its previous range.

Traders wanting to establish a short position in IBM can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes at previous support of $121.9. For traders wanting to establish a long position the current setup is to wait for the stock to get back to calculated support, given that the stock is still near from this level.