Back on April 17th IBM took a big hit.  This earnings inspired flush(-4.15%) attracted the heaviest volume in months.  IBM remained fairly stable through the rest of April and into early May but it was clear a bear channel was building.  By late May shares were down 12% from the April 16 highs.  IBM has rebounded nicely this month and is beginning to put some distance on the upper band of its 10 week bear channel.  The stock still has a couple of significant overhead challenges, namely the April lows and a declining 50 day moving average, but layers of support are now in place.  

We regard IBM as a fairly low risk buy near current levels.  On the upside, a close above $138.00 would clear the 50 day as well as the post earnings spike low set back on April 16.  A close back below $130.00 would drop the stock back into the bear channel indicating the 200 day moving average remains a threat. 

At time of publication we do not have a position in IBM.