Dow Stock Attempting Rebound Before Earnings

IBM has added 7% so far for the month of April

Managing Editor
Apr 17, 2020 at 1:34 PM
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Shares of blue-chip IBM (NYSE:IBM) are up 2.8% this afternoon, last seen at $118.89. The equity has been inching its way higher from its March 23, 11-year low of $90.56, and is now up 7% for the month of April. Today's gains has the tech name attempting yet another rebound close back above the 40-day moving average, a feat made just twice since late February. 

Daily IBM Since 40MA

Looking ahead, IBM is scheduled to report first-quarter earnings after the close Monday, April 20. During the past two years, the security has averaged a 5.6% move, regardless of direction, the day after reporting. This time around, the options market is pricing in a higher-than-usual, 8.1% swing for Tuesday's trading.

Digging deeper, puts have been a favorite among options traders.This is per IBM stock's 10-day put/call volume ratio of 1.54 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio ranks in the lofty 96th annual percentile, indicating puts have been purchased over calls at a faster-than-usual clip as of late.

Analysts have also been uncertain when considering IBM. Heading into today, eight of the 12 covering firms sport a tepid "hold" recommendation. Even further, early this morning BMO Capital slashed its price target on the equity to $135 from $155, though the revised outlook still represents a premium to IBM's Thursday close.

 

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