IBM Weekly Chart Overbot Rising Wedge Negative Divergence M Top

IBM weekly chart on the eve before earnings. Big Blue will be singing the blues. This one has been easy to forecast over the last two months and is behaving well technical-wise. For the February top and overbot conditions, the MACD histogram and stochastics showed negative divergence forecasting the spank down that occurred but the RSI and money flow wanted to see another higher high before committing to any extended down side.

So IBM traveled south and received the March recovery bounce to head back up to satisfy the RSI and money flow request. IBM printed the higher high last week, and as seen by the red lines, the chart shows overbot conditions with a rising wedge and negative divergence in place across all indicators; the kiss of death, she's ready to roll over for good now. In addition, the pink M Top is now finishing the second peak. The candle on the right hand side is in progress right now but the hanging man configuration further reinforces the down side.

Whatever the earnings news is, good, bad or indifferent, this chart, as well as the daily chart, says its time to run for the exits with Big Blue. Key support levels are shown for the way down in the weeks ahead. The 120-130 horizontal channel was in play for nearly one year from late 2009 until the breakout shown in September 2010 and will probably be revisited in late 2011 or 2012. Price should move sideways to sideways down in the weeks and months ahead. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your finanical advisor before making any investment decision.