The International Business Machines Corporation (NYSE:IBM) is a large value stock in the technology sector. The stock’s price is characterized by low variability. The year range is between $114.56 and $152.84.
The price/sales ratio is 2.0 while the price/book is 6.02. The price/earnings ratio is 12.54, while PEG is at 1.16. With the earnings call expected this week, these ratios are unlikely to change.
IBM is currently trading at $126.56. The support level is $115, while the resistance is about $137. Upon the release of Q1 results, the stock could be expected to rally slightly. Zacks Research rates IBM as a sell. Our analysis considers that investors could wait until after the earnings release to sell at a potentially higher price.
IBM has room to move higher
Source – TradingView
At the price of $126.56, IBM is trading at a MACD of zero. There is literally no momentum on the stock, obviously because the stock is still viewed as old and mature. For the risk-averse investor, therefore, there is very little risk on the stock price, and holding is recommended.
However, the trader would want to learn when to enter and exit the stock. The best entry point is when the stock is at a support level and exits close to resistance. What this analysis foresees, therefore, is low-momentum price acceleration triggering profit-taking just after the earnings.
Summary
IBM is certainly not a buy at the current price, irrespective of what the earnings may show. For investors currently holding the stock, a slight price acceleration to the resistance level of $137 is expected. Investors can wait for a slightly higher valuation to sell.
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