Is IBM Stock “a place to hide” in a volatile market? Premarket Readiness Team Talks Big Blue
A former Wall Street darling who was a serial underperformer in the biggest bull market of all time received an upgrade Friday morning. This company is International Business Machines Corp. IBMand that’s the premarket readiness stock of the day.
Long-term IBM price action: IBM hit its all-time high in February 2017 at $174.59. At a price of $129.50, it has a negative yield of 26%. Over the same period, the S&P 500 index generated a positive return of 87% to 4,436.
Short Term IBM Price Action: IBM bottomed on the same day (February 24) as the S&P 500 at $118.81. The recent high on the rebound ($133.08) was hit a day after the index hit its short high on March 30.
On Wednesday, the show hit a low of $124.91 and rebounded to close at $126.14 and end a four-day losing streak.
IBM upgrade from Morgan Stanley: Ahead of Thursday’s open, Morgan Stanley analyst Erik Woodring changed the issue from equal weight to overweight and raised the price target from $147 to $150. The rating, equivalent to a buy rating, is IBM’s first in nearly two years.
That’s not exactly a ringing endorsement of the company, but more or less identified the issue as a safe haven and boasting a 5.1% dividend yield in a volatile investment environment. In other words, “a place to hide in the midst of macroeconomic uncertainty”.
PreMarket Prep’s perspective on IBM: When the issue was covered on the show on Thursday, it was trading in the $128.30 area.
Co-host Denis Dick is mixed on the matter: “I’m not shorting him, he’s been a bit sleepy lately and his media coverage could spark a rally.”
The author of this article has focused on clearing the pre-market high ($129.80) and staying in the $130 handle. Should the issue go into retreat mode, there was potential support at the top of Wednesday’s range at $126.67.
IBM Price Action: On the open, the show caught a bid with the index and broke through the pre-market high, rallying to $130.58 and reversing course.
The ensuing decline found support ahead of Wednesday’s range high ($126.67), reaching just $128.49. The stock rose 0.82% to $127.18 on Thursday afternoon, according to Benzinga Pro.
The IBM discussion from Thursday’s show can be found here: