IBM: Elliott Wave Analysis

IBM: Elliott Wave AnalysisIn his recent update in Forbes, John Navin mentioned IBM as one of the old warhorse stocks that is providing leadership in keeping the market well supported. John has some very good instincts and is an engaged partcipant in the US stock market. My being removed from the center of action perhaps allows me to review a chart dispassionately, and when I looked at IBM, it was easy to spot many interesting Elliott Wave patterns. These are all labelled clearly in the attached chart for your reference, so I won’t bore you with repeating the same stuff.

Your key take away from my post today is this. When a five wave rally approaches the end of its fifth wave, you must get ready for a correction that will be BIGGER and last LONGER than the previous two corrections. Now wave 4 went from 185.70 to 158.60, or $27. I am willing to wager that after we finish one more upmove, we will get a fairly aggressive sell off that will be at least $27. More likely, the downmove will take us to around 159, which is a significant move for most traders, and even for investors.

My only worry is I have been having such a wonderful run with my calls on Gold, Silver, Oil, Euro, Caterpillar, Apple, Indian Rupee and others that IBM could turn out to be the ‘correction’ I will eventually experience! Anyway, you have the chart with my comments and you can judge for yourself where I could go wrong. Good luck.


  • John Navin

    Thanks for the e-wave work on IBM. Your count seems to fit into my larger picture.

  • Joe Hentges

    This analysis is very enlightening. One thing I am trying to understand is your thought of one more possible move up before the larger move down. Is there some 60min or other timeframe wave count that is providing a clue. Trying to learn. It does look like a rising wedge pattern on the daily chart (July until now), which would be bearish, but that is not an Elliott Wave interpretation. Thanks for the help.

  • […] followed up John’s story with a post in my other blog that IBM will likely head lower to $159 after making one final move […]

  • Bob

    Dear Wave Wizard Extraordinaire…….in your December 2011 post/analysis of IBM you mention “there is good support at 187 and 179, and a recovery to 195 (max 201) is quite possible.” I have studied the chart using time intervals of…..daily, hourly and 30 minutes and can not uncover the reason(ing) for your support target price of 187 ( which it hit exactly on 6/4/2012). Could you give me a clue as to how you arrived at that support number so effectively?

    • Hi Bob, just call me Ramki, please! Thanks anyway. I dont remeber how i came up with that level. I cant remember what numbers I came up with 2 days back because I deal with numbers all day. Going back to that chart will involve time, something i am terribly short of now. hope you understand.

      • Bob

        Dear Ramki….I completely understand, and appreciate your time constraints. I am always honored just to have you acknowledge my questions regarding EW analysis. Stay well…you are the best!

Leave a Reply