Shares of IBM are down $12 on the day on earnings…
But this isn’t the first time IBM has fallen this hard, this fast. Over the last year, it plummeted three times to the same support level and bounced each time.
IBM now sits at the same support level, oversold.
All I want to do here is turn quick profits from an oversold bounce off previous support… and get out. That’s it. Get in. Get out. RSI and MACD are telling me this is oversold. MFI is beginning to show signs of bouncing off oversold levels, too.
If I’m right, IBM should bounce off previous support. But there is still risk here, as with all trading opportunities in a wildly volatile market. Consider buying to open the IBM January 2015 180 call up to $3.
When it comes to trading IBM, do not risk the house. Do not risk more than you can afford to lose. Trade with 2% to 5% of portfolio per trade. That’s it. Never risk 100% of anything on any trade out there.