IBM Corp shares were clearly very good value when they hit a low of $115.75 in December, and after spending early January in the doldrums, they have come up smartly in the past three weeks and on Monday closed at $143.25, up $3.75 on the day, following a recommendation from Gartner Group Inc. That’s a very healthy appreciation of some 23% over the low point, and will have done much to reassure the stock’s long term fans, who endured the misery of watching a high of $161.875 early last year dissolve into that dismal $116. So what has changed since the end of last year? We haven’t seen the Gartner note, and on the face of it, very little has changed. The first quarter figures are going to be rotten or worse, and while there is hope that IBM will get substantial numbers of 9370s away in the second quarter, ahead of the official first ship date, that was always considered likely – and the 9370 looks rather less exciting now than it did at launch. The recovery in IBM’s share price looks more a reflection of the fact that markets always overdo things in both directions than any fundamental change in outlook. So long as Wall Street’s bulls continue to roar, the downside risk is limited – but there is little to go for, short-term.
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