IBM Shares Drop 1.73% as Bearish Candlestick Signals Rally Exhaustion Near $274 Resistance

IBM (IBM) shares declined by 1.73% to close at $267.53 during the latest session on September 24, 2025, retreating from the session high of $273.65 amid lower trading volume compared to the prior day.
Candlestick Theory
Recent candlestick patterns reveal significant technical developments. The September 24 session formed a bearish engulfing pattern with a long upper wick (high: $273.65, close: $267.53), indicating rejection at the $273.5–$274 resistance zone where prices peaked twice in late September. This aligns with the September 23 spinning top candle (high: $273.30, close: $272.24), collectively signaling exhaustion after the rally from the September 2 low of $238.25. Support now emerges near $266–$267, coinciding with the September 19 gap-up opening and the 50-day moving average. A decisive close below $265 would invalidate this support and expose $260, while clearance above $274 is needed to resume bullish momentum.
Moving Average Theory
The 50-day moving average ($263.48) remains above the 100-day ($257.82) and 200-day averages ($248.65), confirming an intermediate bullish trend. However, the latest close ($267.53) undercuts the short-term 5-day EMA ($269.20), suggesting near-term pressure. Confluence exists at $263, where the 50-day MA and mid-Bollinger Band converge. The 50/100/200-day stack retains its bullish sequence, but deterioration below the 50-day MA could trigger profit-taking toward the 100-day level.
MACD & KDJ Indicators
MACD (12,26,9) shows a narrowing histogram as the signal line converges toward the MACD line near the zero axis, indicating fading bullish momentum. This aligns with the KDJ oscillator (K: 63.7, D: 57.9, J: 75.3) retracing from overbought territory. While KDJ's exit from the >80 zone often precedes pullbacks, the MACD's sustained position above zero tempers bearish implications. Divergence appears as price tested higher highs while KDJ formed lower highs, warning of weakening upside vigor.
Bollinger Bands
Bollinger Bands (20-day) exhibit contraction, with bandwidth narrowing 15% over the past week, signaling reduced volatility and potential breakout. Price closed near the mid-band ($265.50), suggesting equilibrium after rejection at the upper band ($275.50). The lower band ($255.50) offers major support if bearish momentum accelerates. The band squeeze reinforces the critical nature of the $274–$255 range, with a directional resolution likely.
Volume-Price Relationship
The down day on September 24 occurred on 16% lower volume than the prior session, diminishing the bearish conviction despite the price drop. Notably, the September 22 rally (+1.87%) saw volume expand 87% above its 20-day average, validating the breakout. However, this week’s pullback lacks commensurate volume support, suggesting the retreat may lack sustainability. Volume divergence remains absent, though bearish confirmation would require higher volume on further declines.
Relative Strength Index (RSI)
The 14-day RSI registers 75.2, holding above the overbought threshold (70) for four sessions. Historically, IBM has corrected after prolonged stays in this territory, as seen in late July’s sharp decline from RSI 77. While overbought RSI alone doesn’t guarantee reversals, confluence with the $273.5 resistance and bearish candlesticks increases the probability of consolidation. Traders should monitor for RSI retreats below 70 to confirm cooling momentum.
Fibonacci Retracement
Applying Fibonacci levels to the July 23 high ($288.08) and September 2 low ($238.25), key retracement zones emerge at $250.00 (23.6%), $257.35 (38.2%), and $263.17 (50%). The recent reversal occurred just above the 61.8% retracement ($269.03), reinforcing this resistance. Current price action at $267.53 positions IBM near the 50%–61.8% zone ($263–$269), a pivotal area where buyers defended during the September rally. Sustained trade below $263 may extend declines toward $257–$250.