Best Shorts: IBM Setup
International Business Machines Corp. (NYSE:IBM) has bounced a huge amount after taking a huge beating on earnings. The stock dropped from $207.15 to $187.58 after earnings were announced. Since the low on April 22nd, 2013, the stock has soared, hitting a high today of $198.16.
This vertical move higher is a retrace that is gathering irrational exuberance. I am looking to pull the trigger on a short around the $199.00 - $200.00 level. This snap back rally is inching towards the 61.8% Fibonacci Level as well as partially based off of short covering and continued buy the dip, buy anything mentality. Next market drop will see the weakest earnings players fall the quickest.