We were watching yesterday’s close like a Power Ball lottery as the Dow danced around our 13,777.77 fluff target from mid-December. The Nasdaq was just a smidge above our 3,150 target and we nailed the S&P 500’s close of 1,492 on Tuesday. We were a few points off from pulling off a hat trick but yesterday’s close was exactly what we have been calling for.
From Sunday’s Weekly Wrap:
If IBM can score numbers above the high estimate of $5.32 a share and revenues come in north of $30 billion, shares could reclaim the $200 level and challenge the 52-week high. This would require an 8%-10% move in the stock which might be asking a bit much from Big Blue, but not impossible.
IBM is a huge Dow component and makes up a whopping 11% of the index. Chevron is next as it makes up 6.5% of the Dow’s weight. If IBM can beat current estimates with higher revenue AND ups their outlook then we could easily see the Dow challenging our 13,777 fluff target Wednesday morning.” (END)
The Dow added 67 points, or 0.5%, to finish at 13,779 on Wednesday. The index held green all session long but the bulls can thank IBM which accounted for 65 points of the Dow’s gains. The high point for the blue-chips came in at 13,794 and we have mentioned resistance at 13,800. If cleared, the bulls could make a run past 14,000 before the bears’ wakeup from hibernation. The all-time high for the Dow is 14,198 (intraday) and was hit on October 11, 2007. Support is at 13,600 and then 13,450 on a pullback.
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