In early trading, IBM has shifted lower in response to its Tuesday-night earnings report. The company said that its third-quarter profit rose 6% to $2.36 billion, or $1.68 per share, as revenue reached 6.6% higher to $24.12 billion. These numbers were roughly on par with analysts' expectations of per-share earnings of $1.67 on $24.09 billion in sales.

The concerning part of IBM's report, however, was sales to the financial industry which is Big Blue's biggest customer segment. Amid a credit crunch and subprime worries, this sales number drifted lower. Revenue in the U.S., the region most impacted by the financial crisis, moved just 3% higher. Asia was the fastest growing market segment for IBM, posting revenue gains of 9% - or 6% after currency adjustments.

The equity's move lower today despite a modest positive earnings surprise could indicate that expectations were overly inflated ahead of the earnings report, resulting in disappointment among investors. Heading into the earnings report, short interest was notably low, accounting for 1.4% of the equity's float following a 28.7% drop during the last reporting period. Analysts were gathered in the bullish camp, awarding 7 strong buy and 2 buy ratings, 4 holds, and no sells.

Technically speaking, IBM has been in rally mode since mid-2006, hugging support from its 10-week moving average as it worked its way to a 5-year high. The stock has failed to make any headway since late August, however, and remains trapped beneath the 120 mark. Not only is this level notable on a chart, but it is home to peak call open interest in the November series, which will become our front-month as of Friday's close. The combination of options-related and technical resistance could continue to challenge IBM in the near term.