IBM has pulled back to its historically bullish 126-day moving average
Tech stock IBM (NYSE:IBM), otherwise known as International Business Machines Corporation, is up 0.7% at $241.10 today. The stock is up 9.7% since the start of the year -- hitting a record high in mid-March -- but is having a tough time staging a meaningful breakout back over the $243 region. A short-term rally could be in the works though, given that the stock is flashing a historically bullish signal.
The shares are within one standard deviation of their 126-day moving average (representing half a year of trading). Per Senior Quantitative Analyst Rocky White, IBM has encountered this trendline for the first time in at least eight of the last 10 trading days, after spending at least 75% of the last six months above it. Within these parameters, three other signals occurred in the past three years. IBM was higher one month later 100% of the time after these events, averaging a 10.9% gain.
Should IBM extend its recent bounce, analyst bull notes could provide tailwinds. Of the 20 analysts covering IBM, 12 carry a "hold" or worse rating, while the 12-month consensus price target of $249.97 is a slim 3.8% premium to current levels.