IBM stock plummeted over 24% following a preliminary Q2 earnings warning and is on pace for its worst single-day drop since 1987. To buy the dip, determine your position using either dollar-cost averaging (DCA) or technical analysis. [1, 2, 3, 4]
Using a 30-minute order block is a valid technical approach to potentially buy the dip, but you must be careful:
- Wait for Confirmation: Waiting for a 30-minute order block to appear is a solid strategy to catch a temporary bounce, but it's risky to rely on it alone. After such a massive crash, the stock may exhibit high volatility and form multiple lower lows before finding a true bottom. [1]
- Institutional Imbalance: Look for distinct gaps or "fair value gaps" (FVGs) within the order block where institutional money stepped in.
- Watch the MACD and RSI: Check if the daily Relative Strength Index (RSI) indicates oversold conditions and watch for a bullish crossover on lower timeframes before pulling the trigger.
- Fundamental Context: The selloff was driven by customers delaying software/mainframe contracts to prioritize AI hardware. Before jumping in, review the official full Q2 earnings release (scheduled for July 22) to see if management's revised guidance reflects long-term stability.
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