ION Geophysical Price Drills Through Support

Today's broad market weakness helped send the price of ION Geophysical Corporation (NYSE:IO) below the support of a medium-term trendline. As you can see from the chart below, the sloping support level has prevented the bears from pushing the price lower for most of the past year, but today's close below the support suggests that the story has changed and that the near-term direction of the stock is likely to be downward. The spike in volume that accompanied the move below the trendline will be used by traders to confirm the trend reversal; many active traders will keep a bearish outlook on the stock until the price closes above newly formed resistance (currently near $17).

We've also attached the MACD indicator to the bottom of the chart because it recently crossed below its signal line. This bearish crossover will be used by traders to confirm today's breakdown and many traders are likely to set their target prices near the next level of support, which is shown on the chart by the horizontal trendline ($15).