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10/07/99
IBM Corp (IBM)
Points to watch:
An increasingly ugly looking
chart. The stock closed down 2.81 at 116.38 today, below the support
provided by the 38% retracement level (of its April-July rally), and below
its August lows. A double top has formed on the stock's daily
chart. Strong negative divergences shown by MACD and RSI with price
on the second top add further confirmation to the topping pattern.
Technical indicators continue to break down, with daily MACD giving a sell
signal on 9.30 and weekly stochastics giving a sell signal when it fell
below 70 from overbought last Friday. The stock is likely to retest
its June 2nd low of 109.43. The presence of the 50% retracement level at
110.13, and the stock's 200 day moving average at 108.31, make the range
from 108.31-110.13 a critical support level the stock must hold in order
to avoid a meltdown.
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