Monday, January 9, 2012

I am concerned about GOOG and IBM

On the day when AAPL made a new all-time high, and SOX is trading up almost 2%, two of my favorite "generals" - GOOG and IBM - are trading down and are below their 2011 closing prices. I really do not think that NDX can continue to advance without these major heavyweights.

So I am going to prepare myself for the worst case scenario - GOOG and IBM missing their Q4 earnings, or guiding down Q1. Following charts are going to predict a dire outcome. They are merely a carbon copy of what has already happened with those stocks. But I am a strong believer of charts repeating again and again. This said, something pretty major would have to happen for this scenario to play out.

Two things would make me less worried:

1. GOOG's ability to turn around right here, at trendline, without closing below it even for a day.
2. IBM not closing below 173 on weekly basis.

click on charts to enlarge

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