Typically, I don’t like to play earnings because the risk is too high for my liking. Honestly, how many times have we seen a company come out with killer earnings only to have the stock get completely crushed after the announcement. IBM has caught my eye as it has been in a downtrend for some time but seems to have found a bottom in the near term. I see an inverse head and shoulders setup and an ascending triangle. I am looking for a breakout above $165 post earnings regardless of whether IBM beats or not. I think a strong push above $165 could start a nice rally up to resistance at $180. There is significant risk here ahead of earnings as most analysts have guided for a move lower in the longer term which very well may be in the cards. Resistance at $165 has been very strong so if it breaks the stock will likely experience an explosive move upwards.
Chart updated 4/29
This is not intended as advice nor will I be held responsible for any losses that you may incur following my ideas. These are simply my personal thoughts regarding the company and I am in no way affiliated with the company mentioned. I am long May expiry 175 Calls.