IBM's graph seems collapsed after the results

International Business Machines (IBM) has a difficult session: shares sell about 7.5% Wednesday afternoon, after the third quarter results.

While IBM actually managed to post earnings figures slightly above analysts' expectations, the company saw its revenues and posted a second consecutive decline in its high-margin (and tightly monitored) solutions business.

This is not exactly an unprecedented move further down; IBM sold 7.53% in April when it released the first quarter figures. But the difference here lies in the price action. That is, IBM's price action seems interrupted as a result of this latest blow to the company's stock price.

To find out what's going on in IBM's stock – and what to do with it – we turn to the chart for a technical look.

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At a glance, Wednesday's session is ugly, but it was more or less comparable to that of the course in October. IBM shares have lost 12% of their market value since the release of the calendar in October, largely underperforming the rest of the S & P 500.

IBM's breach of its short-term uptrend earlier this month provided an important early warning that stock control was passing from buyers to sellers. Now, with actions that violate the level of support established this summer, sellers clearly control everything.

And the violation of $ 137 per Wednesday is a sell signal.

This means for IBM bulls that it makes sense to stay on the sidelines and wait for the sale to calm down before attempting to jump and buy shares. With support at $ 137 removed, a high probability trade is another drawback.

The relative strength, the side indicator at the bottom of the IBM chart, adds an additional confirmation to the sell signal that we see here. Relative strength has been in a downward trend since the beginning of the year, indicating that IBM has consistently underperformed the rest of the S & P 500 since the beginning of the year. . In other words, even though IBM was still on the rise, there are now on the market other alternatives that work better for investor portfolios than IBM.

So it makes sense that investors stay away from IBM until buyers can regain control and get an offer from Big Blue again.