IBM reported strong Q4 earnings after-hours on 1/21/2020. Excluding items, IBM earned $4.71 per share beating the $4.69 per share consensus. IBM reported Q4 2019 revenue of $21.77B, which also beat consensus estimates of $21.64B. IBM forecasted 2020 EPS of $13.35, which exceeded consensus estimates of $13.29. The important Cloud and Cognitive Software segment, which includes their recent Red Hat acquisition, also exceeded expectations. Revenue from this segment grew 9% q/q and came in at $7.24B beating consensus estimates of $7.12B. Red Hat revenue grew 24% q/q. This represents an acceleration of growth for Red Hat, which grew 19% in the prior quarter. Let’s see what the charts tell us.
IBM (IBM) Weekly Chart – annotations by askSlim.com
At askSlim.com we use technical analysis to evaluate price charts of stocks, futures, and ETF’s. We use a combination of cycle, trend and momentum chart studies, on multiple timeframes, to present a “sum of the evidence” directional outlook in time and price.
askSlim.com Technical Briefing: The current neutral cycle configuration and positive weekly momentum is likely to limit any downside in the stock to the intermediate-term Fibonacci supports between 140.02 – 136.46.
On the upside, there is an intermediate-term Fibonacci resistance at 147.79. If the stock closes above 147.79, there is an intermediate-term Fibonacci projection/target zone from 149.34 – 154.93. On the downside, there are intermediate-term Fibonacci support zones from 140.02 – 136.46. Our analysis suggests that for the bears to regain control of the intermediate-term, we would likely need to see a weekly close below 130.90.
askSlim.com Sum of the Evidence: IBM has a neutral weekly cycle configuration that suggests that both declines and advances will be relatively muted over the next several weeks. Once the next intermediate-term low forms, the analysis suggests that stock has a chance of reaching 149 by May.
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