IBM looks ready to hit the skids following the bull-trap high recorded on June 19 at 199.99. The target of the pattern shown is 178.07, and it looks enticing enough that I’ll recommend bottom-fishing there. Accordingly, buy two August 180 calls if and when the stock gets within 15 cents of the target. Stop yourself out if the IBM trades 177.89 or lower. _______ UPDATE (2:55 a.m. EDT, July 20): Big Blue has reversed after having gotten no closer to our downside target than 181.85. This is not only bullish for IBM, but for the stock market as a whole, since the company is a reliable bellwether. Bulls could nail it now with a print at 197.21, since that’s where an impulse leg would be generated on the daily chart. _______ UPDATE (July 25, 10:23 p.m. EDT): Instead of creating a confidence-inspiring impulse leg with its most recent upthrust, the stock has suspiciously doubled-topped with an external peak at 196.85 recorded in early July. The ersatz rally pattern that has resulted points to 201.85 with a midpoint resistance at 195.02, but because the point B is sausage (see inset, a new chart), we’ll have to take those numbers with a grain of salt.
