IBM closes lower for the 2nd day in a row
International Business Machines Corporation (IBM) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, IBM ended the week -1.77% lower at 150.70 after losing $3.61 (-2.34%) today, significantly underperforming the Dow Indu. (-0.09%) ahead of tomorrow's Presidents' Day market holiday. The bears were in full control today, moving the market lower throughout the whole session. Closing below Thursday's low at 153.41, the stock confirmed its breakout through the prior session low after trading up to $3.64 below it intraday.
Daily Candlestick Chart (IBM as at Feb 14, 2020):
Friday's trading range has been $4.79 (3.1%), that's far above the last trading month's daily average range of $2.83. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently notably higher than usual for IBM.
Regardless of a strong opening International Business closed below the previous day's open and close, forming a bearish Engulfing Candle. The last time this candlestick pattern showed up on January 23rd, IBM lost -1.62% on the following trading day. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
After having been unable to move above 154.83 in the prior session, the share ran into sellers again around the same price level today, failing to move higher than 154.56.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bearish Engulfing Candle" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for International Business. Out of 66 times, IBM closed higher 65.15% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 66.67% with an average market move of 1.19%.