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IBM             had a disastrous quarter in Q3 2014, where growth dramatically slowed. The market has punished IBM             by selling it off hard. Following its drop from $190 to $160 IBM             went into a long period of accumulation. The chart reminds me a classic Wyckoff pattern. As Richard Wyckoff explained in his seminal book on tap reading, large Wallstreet operators are not afraid to buy a fallen stock, provided the stock is large, liquid and has good earnings . In fact, they welcome an opportunity to accumulate shares at discount prices confident in their ability to mark up the stock once they have built a full position. While Wyckoff's work cover the classic period of 1920-30, I think its core is as relevant today as it once was.

IBM             fits the profile perfectly. It is an institutional stock that mutual fund managers are extremely comfortable with. Therefore, it is reasonable to assume that large operators are accumulating the stock. The chart, in general, seems to confirm. You can see a typical pattern of the stock being stuck in a ~ 8% range with a very strong support in $152 area. The support has been tested 3 times so far and held up. Finally, on April 23 IBM             broke out of the range on increased volume . This is a sign that accumulation is over and the large operators are ready to mark up the stock.

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