Stock of the day: IBM

Today we’re circling back to IBM, a company we’d previously analysed at the beginning of September. Back then, the price was around 127 USD and we spotted 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 the odds of that happening are really small.”

It was a spot-on analysis because the whole of September was terrible for IBM. On the last trading day of the month, the price fell below 119 USD, reaching a new low from the end of February. As you probably know, October brought us a reversal and it did not bypass IBM. Here we also do have rises but we still remain below two crucial resistances. The first one is the lower line of the symmetric triangle pattern and the second one is 125.8 USD (blue), which is a key, mid-term horizontal resistance.

As long as we remain below those two resistances, the sentiment is negative and sellers have a greater chance of success. However,  should the price come back inside of the triangle, it would definitely be a signal to go long, based on the false bearish breakout which would emerge as a result.