Stock of the day: IBM

The global stock markets are trying a bounce today but this rise isn’t happening everywhere and on every asset. There are still some instruments where we do have strong sell signals. Actually, we have instruments, where those sell signals are very fresh, like today’s IBM.

IBM has been falling sharply since mid-August but a proper sell signal was triggered yesterday. The reason is that up until yesterday the price had been locked inside of a giant symmetric triangle pattern (black). The price was moving sideways with decreasing volatility over time. Yesterday, IBM managed to break the lower line of the triangle, which in theory brings us a proper sell signal.

Sentiment remains negative as long as the price stays below the lower line of the triangle. A come-back above is of course possible but is not very probable. In case that happens, we’ll have a buy signal but odds of that are really small.