IBM Stock Dips Despite First Revenue Growth in 23 Quarters

By Emma Duncan / January 19, 2018 / www.schaeffersresearch.com / Article Link

Technology powerhouse IBM Corp. (NYSE:IBM) is trading lower, as a disappointing full-year forecast overshadows the company's first rise in revenue in 23 quarters. In response, the tech stock has received mixed analyst attention. Of note, brokerage firm Deutsche Bank raised its price target to $160 from $150, while RBC cut its price target to $180 from $183. The Dow stock was trading 2.4% lower at $165 at last check.

IBM has had a rough year, dipping to a 52-week low of $139.14 in mid-August, though it's since recovered some of these losses. Of course, Big Blue is still far removed from its annual high near $183 from last February, and its 14-day Relative Strength Index (RSI) touched 81 yesterday, showing it was technically overbought coming into the session.

In the options pits, sentiment has been leaning towards the bulls' camp. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows IBM's 50-day call/put volume ratio is 2.21, ranking in the 97th percentile of its annual range. This suggests that calls have been purchased over puts at a faster-than-usual clip during the past ten weeks.

On the other hand, near-term options traders were more focused on puts, based on the tech concern's Schaeffer's put/call open interest ratio (SOIR) of 1.34 -- a reading that ranks in the 88th annual percentile, showing such a put-skew is unusual. Over the past 10 days, the January 2018 150- and 155-strike puts saw the largest increase in open interest by far.

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