IBM – International Business Machines Corporation – The multinational computer technology and IT consulting corporation saw its shares retracing back to the support line at $106.00 after breaking through resistance at $107.00 and reaching $110.00. From July 08 double top at $129.00 prices break through the main bullish support line at $124.00 switching the trend from bullish to bearish. The decline rolled out reaching support at $110.00 on September 08 when a corrective up move developed. The reaction found resistance at $123.00 before resuming to the downside. The October 08 triple bottom breakout at $109.00 was the key movement that cleared the way to the second phase of the downtrend. A Long Tail Down pattern to $84.00 added more weight to the bearish evidence. The November 08 final sell off reached the 2005 solid support at $70.00 before generating a Low Pole pattern which swiftly gained back some ground to $82.00. A sequence of double top breakout patterns helped reaching the main bearish resistance line at $94.00 where the first penetration attempt failed. A pull back to $90.00 has been followed by a sharp up thrust that breaking through the main bearish resistance line at $93.00 changed the trend to bullish. Lately prices raised above resistance at $103.00 and then violated a multiple top pattern at $107.00 approaching short term target at $112.00. Prices are now expected to take a breath before resuming the uptrend. Relative Strength vs the market has just turned negative in the short term predicting a period of underperformance. Stay long and increase only at double top breakout at $111.00 with short term target at $118.00. In the medium term the objective is set at $126.00. On the downside close all longs at penetration of the main bullish support line now crossing at $105.00 with possible contraction down to $88.00.
NVLS – Novellus Systems, Inc. – The leading supplier of chemical vapor deposition equipment used in fabricating integrated circuits saw its shares breaking through main bullish support line at $17.25 triggering a trend reversal. From December 06 peak at $35.00 prices declined breaking through the main bullish support line at $31.75 and reversing the trend to bearish mode. After trading sideways during first semester of 2007 with base at $29.75 the movement made a key step penetrating support at $29.50 and clearing the way for major contraction. A double bottom support at $28.50 gave way to a corrective pull back to $33.25 before a Long Tail Down pattern took prices to $25.50. Again prices traded sideways with base at $25.50 until the December 07 multiple bottom break out at $25.25 which opened wide for further downside retracement to $19.00. The final sell off developed during October 2008 reaching the double bottom low at $10.50 which successfully contained the downtrend. The reaction from the lows found initial resistance at $15.00 and retraced to $11.50 before a sharp up thrust break through the main bearish resistance line at $13.25 switching the trend to bullish. Lately prices reached major resistance at $18.50 and after clustering for few weeks in that area the double top breakout at $18.75 added more weight to the bullish evidence. The movement reversed back to $17.00 though turning out being a Bull Trap pattern. Relative Strength is negative short term implying a likely underperformance of the stock vs the market. There is no reason left to stay long. Close all longs with downside target set at $14.50. On the upside open longs at violation of the main bearish resistance line now crossing at $18.50 with medium term target set a $24.00.