Watson is an artificially intelligent computer system developed in IBM’s DeepQA project (named after IBM’s first CEO, Thomas Watson).

Watson became famous for competing on Jeopardy and beating former winners (actual humans) to get the first place prize of $1 million.

Unfortunately, Watson doesn’t really have an opinion about IBM’s stock.

Although there are plenty of other algorithm-crunching computers out there, a quick old-fashioned eyeball assessment of IBM (NYSEArca: IBM) may offer more insight than Watson and the algos.

For the past year and a half IBM has carved out, what chartists may call, a triangle.

The red line equals resistance, the green line support. Interestingly, the 20 and 50-day moving averages converge around 191 to create another line of support.

The 190–193 range seems important for IBM and may well set the stage for the next move.

IBM is not just any stock. It’s a deep blue blue chip and the second biggest component of the Dow Jones Industrial Average (NYSEArca: DIA). It used to be the biggest until Visa joined the fold.

IBM accounts for 7.20% of the Dow.

The Dow Jones also finds itself in a ‘where the rubber meets the road’ kind of a situation. A potential flag formation within a rising wedge may rudely interrupt the recent lack of movement and set up a wicked fake-out move.

A detailed analysis of the Dow Jones along with an up side target and low-risk buy trigger (if it triggers) is available via the Profit Radar Report. 

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

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