IBM shares rebound on Thursday, tech company inks five-year IT deal with Australian government

IBM said on Thursday that it had signed a five-year deal with Australias government estimated at approximately AUD 1 billion, the scope of which includes hardware, software, support and cloud-based services. The agreement also encompasses “joint innovation programs” in areas such as research, information security and quantum computing, the company said.

IBM shares closed higher for the fifth time in the past thirteen trading sessions in New York on Thursday. The stock went up 1.33% ($1.86) to $141.43, which also was the sessions high and a price level not seen since June 22nd ($141.81).

Shares of International Business Machines have retreated 7.82% so far in 2018 compared with a 2.36% gain for the underlying index, S&P 500 (SPX).

In 2017, IBM’s stock fell 7.57%, thus, it again underperformed the S&P 500, which registered a 19.42% return.

IBM pointed out that the arrangement would ensure benefits for government entities, which already have existing partnerships with the tech giant. These entities include the Australian Taxation Office, the Department of Human Services, the Department of Defense as well as the Department of Home Affairs.

According to Michael Keenan, Australia’s Minister for Human Services and Minister Assisting the Prime Minister for Digital Transformation, the deal has been “structured to enable small and medium-sized firms to engage with IBM through ‘channel partner’ arrangements to ensure they also benefit.”

Additionally, the deal is expected to generate more than AUD 100 million in savings for the government.

“The whole-of-government agreement reflects the growing importance of technology to the government’s transformation agenda,” David La Rose, Managing Director of IBM Australia and New Zealand, said.

“For agencies it will be more simple and cost efficient to engage with IBM. While our technologies make it possible for government to deliver smarter, integrated, always-on digital services for citizens,” he added.

According to CNN Money, the 21 analysts, offering 12-month forecasts regarding IBM’s stock price, have a median target of $165.00, with a high estimate of $200.00 and a low estimate of $125.00. The median estimate represents a 16.67% upside compared to the closing price of $141.43 on July 5th.

The same media also reported that 13 out of 25 surveyed investment analysts had rated IBM’s stock as “Hold”, while 9 – as “Buy”. On the other hand, 2 analysts had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, todays levels of importance for the IBM stock are presented as follows:

R1 – $141.57
R2 – $141.71
R3 (Range Resistance – Sell) – $141.84
R4 (Long Breakout) – $142.26
R5 (Breakout Target 1) – $142.74
R6 (Breakout Target 2) – $142.95

S1 – $141.29
S2 – $141.16
S3 (Range Support – Buy) – $141.02
S4 (Short Breakout) – $140.61
S5 (Breakout Target 1) – $140.12
S6 (Breakout Target 2) – $139.91

By using the traditional method of calculation, the weekly levels of importance for International Business Machines (IBM) are presented as follows:

Central Pivot Point – $139.50
R1 – $141.56
R2 – $143.41
R3 – $145.47
R4 – $147.52

S1 – $137.65
S2 – $135.59
S3 – $133.74
S4 – $131.88