Case Study: IBM – Strong Earnings, a Surprise Pullback, and the Perfect Setup
EDUCATION
5/14/20251 min read
IBM Case Study - Gapping down on earnings
IBM presented a textbook earnings season setup: strong relative strength and a rising Accumulation/Distribution line heading into its April report. Despite posting solid results, the stock gapped down—offering a prime “sell the news” opportunity. With no fundamental issues and support near its lower Bollinger Band, IBM quickly rebounded, breaking above $232.41 and surpassing pre-earnings levels. This move confirmed its strength within a leading industry group and rewarded traders who capitalized on the temporary dip.
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