I referenced Visa as the Dow Jones Industrial Average’s most heavily-weighted component earlier. IBM, or Big Blue, is the second heaviest.
Whether or not the Dow is on the cusp of a sustained leg higher in this breakout, or if instead it is a bull trap/false breakout, will likely be reflected on this chart, too. Thus, I view Visa and Big Blue as excellent tells going forward, especially given the Dow’s prominence of late.
On the daily chart, below, note the weakness today as price zooms down towards the support trendline dating back to the pre-earnings gap lower in April. You may consider shorting a breakdown below it.
On longer-term timeframes, $172 is the major level for bulls to defend to prevent against a significant top.
For now, Big Blue is paddling through the Blue Grotto, searching for direction.
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Maybe one day someone will do an actual analysis of Big Blue. Matching operating units/assets with historic costs and impairments while taking an educated guess at future writedowns. The DJIA is an an old world icon, but IBM is something else – exactly what is anyone’s guess (let’s hope they manage to repurchase all their shares so no one needs to find out what they’ve become and allowing it to gracefully disappear).