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Two Ways: Big Blue Feels a Little Blue?


Strengthen your portfolio in good times and bad.

IBM (IBM) reported results for its fiscal first quarter today after the bell. The global information technology (IT) provider said earnings came in at $0.04 per share, $0.04 better than what Wall Street had been expecting. Revenues, meanwhile, fell 11.5% year-over-year, to $21.7 billion, versus estimates of $22.51 billion.

The company reported gross margins of 43.4% for the first quarter. This is against expectations of 42.4%, according to

Nicknamed Big Blue, IBM said it's ahead of pace for its 2010 roadmap of $10 to $11 in earnings (consensus calls are for $9.78). Furthermore, president and chief executive officer Sam Palmisano the company continues "to perform well in a very difficult economic environment. This was due to our long-term strategic focus; shifting into software and services, divesting of commodity business, and creating solutions that help clients reduce cost and conserve capital."

At the same time, IBM will maintain a disciplined approach to cost and expense management, giving the company a strong financial position, Palmisano added.

Shares of IBM were down about 3% in after-hours trading, to 97.70.

For a broader look, see Prieur Perspective: Springtime for Markets.

From the Bull Pen: IBM is a top-tier stock, but better entries await. Instead, bulls can look to another earnings play: Halliburton (HAL). A simple but intuitive saying traders like to use is, "If it's not going down, it's going up." If Halliburton's quarter was so bad, it had every reason to be taken out on a day like today. Those bullish can consider playing the upside with a 2% sell stop below entry.

From the Bear Cave: In tech land, bears can consider a downside play on Microsoft (MSFT). Is the stock headed for its 50 DMA (near $17.50)? Those bearish can play the downside; a sell stop can be set near $19.

Hope it was a great day, Minyans. We'll see you in the morning!

In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.
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No positions in stocks mentioned.

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