IBM Shares Surge 6.04% In Four Days As Golden Cross Confirms Bullish Trend

Candlestick Theory
IBM's recent price action shows a strong bullish reversal, closing at $256.09 (up 3.04%) on September 8, 2025, with a long green candle extending a four-day 6.04% advance. This follows a hammer pattern near $239.43 on August 25, signaling rejection of lower prices. Key resistance is evident at the September 8 high of $257.15 and the July 24 swing high of $262.05, while support rests near $245.50-$247.00 (recent consolidation zone and August 29-30 lows). The consecutive higher highs/lows and strong closing candles suggest bullish control.
Moving Average Theory
The 50-day MA (approx. $249) has recently crossed above the 200-day MA (approx. $245), indicating a bullish long-term trend reversal ("golden cross"). The current price sits well above all key moving averages (50-day, 100-day ~$252, 200-day), confirming the short-to-medium-term uptrend. The alignment of price above all major MAs reinforces bullish momentum, though proximity to the psychologically important $260 level warrants monitoring for potential consolidation.
MACD & KDJ Indicators
The MACD histogram shows increasing positive momentum, with the MACD line sustaining above the signal line since early September. Concurrently, the daily KDJ oscillators are in overbought territory (K ~84, D ~79), suggesting strong upward momentum but also near-term exhaustion risk. While no bearish divergence is evident yet, the KDJ overbought condition flags the potential for a short-term pullback or consolidation, despite the MACD's continued bullish stance.
Bollinger Bands
Price is pressing against the upper Bollinger Band ($257.15 high on Sept 8), indicating upper volatility extremes. This follows a period of band contraction (mid-late August volatility squeeze), confirming the recent explosive breakout. Sustained trading near the upper band reflects strong bullish pressure. A contraction or price move towards the 20-period moving average (mid-band near $250) could offer a potential dip-buying opportunity if the primary uptrend holds.
Volume-Price Relationship
The 4-day rally saw noticeably higher volume, particularly on the 3.04% gain (+693 million shares vs. 30-day avg ~445 million). This volume surge validates the bullish breakout. The preceding consolidation phase (late August) featured declining volume, indicating a lack of selling conviction. The volume confirmation during the recent advance enhances confidence in the sustainability of the current uptrend, barring sudden low-volume reversals.
Relative Strength Index (RSI)
The 14-day RSI is calculated at approximately 67, moving towards but not yet breaching the overbought threshold (>70). This indicates building bullish momentum without immediate exhaustion. While the KDJ highlights potential exhaustion due to its sensitivity, the RSI's sub-70 reading suggests room for further near-term upside before becoming overextended. Traders should monitor for divergence on any push above 70.
Fibonacci Retracement
Applying Fibonacci retracement to the significant July 24 high ($262.05) to the August 22 low ($236.22) reveals key levels. The 38.2% retracement level ($250.36) was decisively reclaimed during early September, acting as initial support during pullbacks. The current price is testing the 50% retracement level ($256.14). A sustained break above this level could open the path to the 61.8% retracement ($261.80), closely aligning with the previous swing high. This zone ($260-$263) represents significant technical resistance where profit-taking could intensify.
Confluence and Caveats
Confluence is observed between Bollinger Band resistance, Fibonacci 50% retracement, and the psychologically important $260 level, making the $256-$260 area a critical near-term resistance zone. The primary technical picture remains bullish (MA Golden Cross, validated volume, MACD confirmation, above key Fib levels). However, minor divergences exist between the KDJ's overbought warning and the still-neutral RSI, suggesting potential near-term consolidation rather than immediate reversal. Overall indicators favour continued upside bias above $245-$247 support, targeting $261-$263, contingent on sustained volume commitment.