International Business Machines Corp. (IBM) in Predictable Buy Pattern

The stock is currently selling at a super-low P/E of 10.1, but that’s in anticipation of an earnings disaster to be announced this month, as it prepares to roll out a new set of products next month. Investors have seen the stock crash below $400/share twice in the last few months, despite an increased dividend and massive stock buybacks.

Even while some analysts see doom for the iPhone, and see Samsung’s phablets beating the iPad in developing markets, the company is being called an e-book monopolist by a judge even though e-book prices are rising while Apple’s policies have changed.

Apple has become a stock for bold investors who believe things are going to turn around. It’s not for the faint of heart. I’m a Fool. I’m faint of heart.

Technicians buy now

Over the last year International Business Machines Corp. (NYSE:IBM) shares have been on a steady roller-coaster with a slightly rising inflection. From a low last July of $183, they got to $210 in October. Back down to $185.50 in November and then up to $215 in late March. Down to $187 in April and back to $210 in May. Now it’s bouncing off a low of $191.

While the stock may hover around here for a little while, chances are the next move is up. There is nothing fundamentally wrong with the business. The company has become adept at adding high-skill people in growing markets, and laying them off in declining ones, so wages are no longer an issue.

It’s a good time to buy. IBM is not a speculation. It’s an investment. It’s a stock you can accumulate steadily, based on technical patterns, and hold onto, or trade out of at predictable points of resistance. You don’t have to be a Fool to like it, but it helps.

Dana Blankenhorn owns shares of Apple and International Business Machines (NYSE:IBM).. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple, International Business Machines., and Microsoft.

The article IBM in Predictable Buy Pattern originally appeared on Fool.com and is written by Dana Blankenhorn.

Dana is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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