Shares of IBM (IBM) gapped to the downside Friday morning in reaction to its four-quarter earnings results.
Let's check out what the charts are saying.
In the daily bar chart of IBM, below, we can see the sharply lower opening. Prices are trading below the positively sloped 50-day and 200-day moving average lines. Some technically oriented traders will use this break of the averages as a sell signal.
The trading volume increased this month ahead of earnings and the On-Balance-Volume (OBV) line rose. What this means, in my opinion, is that traders and investors went long ahead of the earnings numbers and they will be pressured to dump or liquidate those recent purchases.
The Moving Average Convergence Divergence (MACD) is only slightly above the zero line. A new sell signal could happen in the near future.