HOT TOPICS LIST
- MACD
- Fibonacci
- RSI
- Gann
- ADXR
- Stochastics
- Volume
- Triangles
- Futures
- Cycles
- Volatility
- ZIGZAG
- MESA
- Retracement
- Aroon
INDICATORS LIST
LIST OF TOPICS
PRINT THIS ARTICLE
by Arthur Hill
IBM remains in a downtrend punctuated by rising flags and the stock looks ripe for yet another continuation lower.
Position: N/A
Arthur Hill
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
PRINT THIS ARTICLE
FLAGS AND PENNANTS
IBM Forms Yet Another Rising Flag
08/05/04 09:27:34 AMby Arthur Hill
IBM remains in a downtrend punctuated by rising flags and the stock looks ripe for yet another continuation lower.
Position: N/A
| IBM led the overall market lower with a steady decline that began in mid-February. The decline was interspersed with a series of retracements that amounted to small corrective rallies or rising flags. The first flag retraced 38% of the prior decline, the second flag retraced 62% and the third flag has thus far retraced 50%. As this chart proves the rising flag is a bearish continuation pattern and that represents a reprieve in the ongoing trend. |
|
| Graphic provided by: MetaStock. |
| |
| The current flag looks just as robust as the first two and RSI is turning bearish again. The 14-period RSI reached oversold (below 30) with each flag low and moved above 50 with each flag advance (gray arrows). It was possible to draw a trendline extending up from the RSI lows and look for a break to confirm a change in momentum. When RSI broke below the red trendline and below 50, momentum turned back to the bears and the stock continued lower. RSI generated a similar sell signal in early August. |
| A move below the lower flag trendline (85.3) would provide final confirmation and project further weakness to around 80. Flags are said to fly at half-mast and the decline extended from 91.21 to 83.42, a difference of 7.79. This implies that a continuation lower would result in a similar decline from the flag high (87.42 - 7.79 = 79.61). Traders should watch the flag high (87.4) and the trendline extending down from Feb-02 for signs to the contrary (i.e. bullish). |
Arthur Hill is currently editor of TDTrader.com, a website specializing in trading strategies, sector/industry specific breadth stats and overall technical analysis. He passed the Society of Technical Analysts (STA London) diploma exam with distinction is a Certified Financial Technician (CFTe). Prior to TD Trader, he was the Chief Technical Analyst for Stockcharts.com and the main contributor to the ChartSchool.
| Title: | Editor |
| Company: | TDTrader.com |
| Address: | Willem Geetsstraat 17 |
| Mechelen, B2800 | |
| Phone # for sales: | 3215345465 |
| Website: | www.tdtrader.com |
| E-mail address: | arthurh@tdtrader.com |
Traders' Resource Links | |
| TDTrader.com has not added any product or service information to TRADERS' RESOURCE. | |
Click here for more information about our publications!
Comments
Date: 08/11/04Rank: 4Comment:
|
Request Information From Our Sponsors
- VectorVest, Inc.
- Executive Premier Workshop
- One-Day Options Course
- OptionsPro
- Retirement Income Workshop
- Sure-Fire Trading Systems (VectorVest, Inc.)
- Trading as a Business Workshop
- VectorVest 7 EOD
- VectorVest 7 RealTime/IntraDay
- VectorVest AutoTester
- VectorVest Educational Services
- VectorVest OnLine
- VectorVest Options Analyzer
- VectorVest ProGraphics v6.0
- VectorVest ProTrader 7
- VectorVest RealTime Derby Tool
- VectorVest Simulator
- VectorVest Variator
- VectorVest Watchdog
- StockCharts.com, Inc.
- Candle Patterns
- Candlestick Charting Explained
- Intermarket Technical Analysis
- John Murphy on Chart Analysis
- John Murphy's Chart Pattern Recognition
- John Murphy's Market Message
- MurphyExplainsMarketAnalysis-Intermarket Analysis
- MurphyExplainsMarketAnalysis-Visual Analysis
- StockCharts.com
- Technical Analysis of the Financial Markets
- The Visual Investor