IBM was once the biggest and most reliable tech company buy out there. Over the years, and with the explosion of Apple and other companies, IBM has faded into the background, going from the go-to choice for almost everyone, to becoming a company of nostalgia. This has forced them to rethink their business model and refocus on who their target audience is. More importantly, this fall from grace has forced IBM to think about how to make money in a more effective way. Their stock price has been fairly stagnant when you look at what other companies in the tech sector have done. Think about what Microsoft, Apple, Google, Facebook, Amazon, and Netflix have all done at one point or another in the last decade. IBM hasn’t even come close to this.
Today, IBM is still considered a buy for many experts, but with a simple caveat: be patient. As a short term trader, this seems like completely useless advice at first. Traders do not want to take a position and hold it indefinitely. The whole point of short term trading is so that you don’t have to be patient, right?
Well, not really. Even ultra short term traders need to be patient. IBM is a well established company and they had been in a sideways phase for many years. Efforts to turn this around are finally starting to show results as the company’s fourth quarter fiscal report filed with the SEC revealed that all of the initiatives to help revive growth within the company are beginning to have a payoff. The fundamental analysis that shows what the company is truly worth are increasing. In an efficient market, this will eventually result in a higher stock price. However, because IBM has been out of the limelight for so long, the immediate reaction from Wall Street has been nonexistent.
In other, more prominent companies, this would have sparked an immediate bump upward in price. IBM handily beat analyst estimates when it came to earnings per share, and they have only shown that they are improving when it comes to profitability. If you don’t mind having your money tied up for months, or maybe even years, you could buy several shares and wait. But we want to see more immediate results from our trades.
This doesn’t mean you need to ignore IBM, though. For binary options and CFD traders, there is actually a lot of opportunity here, and it doesn’t involve taking out long term trades or investments, either. There will be movement on the company eventually, you just need to keep an eye on the company so that you are trading the stock when it is moving at its fastest pace and in the most predictable direction. Using binary options or CFDs to help magnify your earnings can even make it so that you don’t need to risk a lot of money to realize profits off of the company. Even a 0.5 percent movement in the right direction can equal big profits when you are patient and time your trades correctly.
In this particular instance, it would be remiss to ignore the fact that IBM’s stock has already reacted to this in part. Since October, the price of the company has risen by more than 10 percent. In an ideal situation, traders would have seen this action before it had finalized and would have established positions to help themselves profit off of it. (As a helpful aside, a signals service or an alert service customized to pick up on movement like this could have automatically told you what was happening. If you don’t have an alert service that you use already, you might want to consider finding a strong one.)