LiteForex - Analytics

    LiteForex

    805.00 7.50/10
    78% of positive reviews
    Real

    Analytical review of International Business Machines Corporation's shares on 16.02.2016

    International Business Machines Corporation, #IBM [NYSE]
    Technologies, IT, USA

    Financial performance

    Index – DJIA, S&P 500;
    Beta – 0.62;
    Capitalization – 177.42 В;
    Assets profitability - 11.90%;
    Revenue - 13.19 B;
    Average volume – 5.23 М;
    P/E - 8.89;
    ATR – 3.21.


    Analytical review

    • The Company has the 11th biggest capitalization in the technologies sector among the issuers listed on the US stock market.
    • In mid-January, the Company provided a report on the 4th quarter, 2015. The Company patented over 7300 technologies during the period under report, which has been a record performance of late.
    • According to the Company's press release, intellectual property sales yielded an average annual profit of over $1.1 billion in 2009-2012. Sales volumes over 2015 are expected to fall by 36% down to $700 million;
    • At the press conference, the company's management announced that the decline in the Company's financial performance was due to the consolidation of the US dollar and the global economy's slow growth rates.
    • The Company's forecast is that the income may decrease by $1.3 billion in 2016 and the EPS may become equal to $13.5 against investors' expectation of $15.

    Summary:

    • In spite of the record amount of patented technologies in 2015, there has been a recent slowdown of over 30% in sale volumes. The results of the latest report will have a negative impact on investors' confidence in the Company's management. The strong USD and a slowdown in the global economy will lead to a further decline in the company value.
    • Thus, we expect that the company's quotes will be falling in the nearest future.

    Trading recommendations for International Business Machines Corporation's CFDs

    Medium-term trading:
    the issuer's value decreased by over 8% over the past 4 trading sessions. We advise you to wait for a technical retracement to the key resistance levels at 122.50/125.50 USD. Once these levels steady and relevant confirming signals appear (PriceAction patterns, for example), we recommend searching for market entry points to open short positions. Risk per trade: no more than 1.5% of equity. Stop order shall be placed a bit above the signal line. We recommend that prospective profits should be fixed partly at the levels of 120.00 USD, 117.00 USD and 113.50 USD, with Trailing Stop applied.


    Short-term trading: the issuer is currently trading between the local support and resistance levels of 120.16 – 122.50 USD. We advise you to search for market entry points once these levels are broken and tested. Positions shall be opened in the direction of the signal line and the nearest support/resistance level. Stop order shall be placed a bit above/below the signal line. Risk per trade: no more than 2% of equity. Prospective profits shall be fixed partly, at 50%, 30%, and 20% of a prospective fluctuation, with Trailing Stop applied.



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