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A Look at IBM’s RSI and Volatility after 3Q17

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IBM’s RSI

Earlier in this series, we discussed IBM’s select technical indicators. Let’s look into IBM’s RSI (relative strength index), which is one of the most widely used technical indicators. IBM’s (IBM) 14-day RSI is 19, indicating that the company’s stock is in oversold territory.

An RSI figure below 30 suggests that a stock has been oversold. An RSI figure higher than 70 indicates that the company’s stock has been overbought.

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IBM’s ATR and volatility

IBM’s ATR (average true range) value is ~1.5. The ATR is used in technical analysis to assess the volatility of a stock. It is helpful in the alignment of traders’ and investors’ investment choices in accordance with their risk profiles.

IBM stock has a beta of ~0.94, which indicates that it is slightly less volatile than the overall market. When the beta is less than 1.0, the stock is usually viewed as relatively less volatile than the overall market

Investors seeking exposure to the tech sector, especially IBM, could consider investing in the SPDR S&P 500 ETF (SPY) (SPX), which has an 8.7% exposure to the application software space and invests ~0.7% of its holdings in IBM.

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