By: YesOption
International Business Machines Corp. (NYSE:IBM) was one of the biggest decliners in trade yesterday on the back of a dismal set of quarterly numbers reported by the company. The company reported earnings per share of $3.68, which missed consensus estimates by $0.64, and revenues came in at $22.4 billion, additionally below estimates of $23.37 billion. Furthermore, the stock was down close to 7% due to heavy volumes, which is a bearish sign.
IBM further revised its full year earnings estimate, which is analysts feel is a huge negative. The company saw a decline in revenues across all segments and sections which did in fact grow, such as cloud computing weren’t able to compensate its overall losses.
Most analysts were unimpressed as the company issued large buybacks and not even investing into new technology. These buybacks, which are worth a whopping $13.5 billion year along with a reported lack of growth in key markets such as Brazil, China and India have many analysts wondering what the future has in store for the company.
When looking at the daily charts for IBM, its shares have broken below all-important daily moving averages which is a tremendously negative for the company. Likewise, the momentum indicator for the stock indicates a clear sell signal and is showing no signs of a reversal any time in the near future. Lastly, the relative strength index formed a lower-high which is a cause of concern for the company in the near future.
Actionable Insight:
Short International Business Machines Corp. (NYSE:IBM) at current levels with an intermediate target at $159.85 with a strict stop loss above $174.25
