Dell acquires Perot Systems

Dell is looking to expand its IT services for businesses along with expanding its potential customer base. During Dell's quarterly earnings report, it stated expectations for a stronger second half of the year despite sector-wide computer demand.

Technically, Dell has spent the better part of 2009 trying to recoup some of the losses incurred during 2008. Furthermore, the stock currently enjoys a measure of support in the $16 region. In addition, the equity has eclipsed its 20-month moving average, which could now act as support if needed. That said, this trendline is descending through the $16 level, so the support is a double-edged sword.

The big question is the long-term effect of the acquisition. Remember that Dell's quarterly sales were down 22% from a year ago, and I am not sure that adding IT is going to help right away. As Dell is able to integrate Perot into its sales pitch to companies, it could help sell more computers. I guess I should have said "if" Dell can turn the Perot acquisition into sales, as there are no guarantees in this economy -- and Dell has just taken a major risk.