Buying company shares (#IBM)

International Business Machines (IBM) is one of the largest US-based IT companies, engaged in hardware manufacturing, software development, and more.

On the daily chart, Monday's session saw the price strongly rebound from the intersection of the Kruzenshtern line and the 110.0% Fibonacci reaction level — an area that also coincided with the balance line. Yesterday's white candlestick confirmed a breakout above the 123.6% Fibonacci level. The Marlin oscillator is accelerating to the upside. The nearest upside target is 265.90 — the 138.2% Fibonacci reaction level, aligned with the February and March highs. A breakout above this level would open the path to the 161.8% Fibonacci target at 282.60.

To hedge the IBM long, we recommend opening a short position in Johnson & Johnson (#JNJ)

On the weekly chart, the price has consolidated below both the balance line and the Kruzenshtern line. The Marlin oscillator continues to decline deep into bearish territory.

The first downside target is the January low at 141.24. The second target lies at the October 2020 low, intersecting with the lower boundary of the descending price channel — 134.81.

On the daily chart, JNJ is also declining sharply below key indicator lines, while the Marlin oscillator has entered bearish territory. We expect the stock to hit the initial target of 141.24.