Big Blue is closing on a long-term target at 215.19 that is clear and compelling (see inset). Let’s try to leverage this Hidden Pivot target by buying four January 190 puts if and when the stock gets within 20 cents of 215.19. (I estimate that the options will be trading for around 1.55-1.65, but the price could rise if a strong rally forces put volatility higher.) This order is good for the remainder of the week. _______ UPDATE (8:37 p.m. EDT ): An inside day has left my strategy unchanged. _______ UPDATE (October 11, 2:59 a.m. EDT): It’ll be quite bearish if IBM generates a downtrending impulse leg on the daily chart after having fallen $3.40 shy of our 215.19 target. A print beneath the September 26 external low at 203.90 low (see inset) would do it.
