Playing the Hewlett-Packard Break Up…or Whatever
- Posted by Greg Harmon
- on February 5th, 2013
News tonight is that Hewlett-Packard, $HPQ, may be discussing breaking up the company. What does this mean? Unlocking shareholder value? Several businesses now that could be take over targets. Leaner operations to drive quicker innovation in smaller focused groups? All of that is both possible and none of it may happen. Who cares! But breakup or not, this stock looks better to the upside. So while the analysts figure this out you might want to give it a whirl from the long side. The chart below shows at least 5 positive signs.
1. The Rising Price Channel. Since November it has been trending higher and moved up off the bottom of the channel Tuesday.
2. The 38.2% Fibonacci Level. After clearing the 23.6% Fibonacci it now has the 38.2% Fibonacci level just over head at 18.07. Should it clear that level then there will be more bulls entering the stock.
3. Potential 3 Drives Pattern. There have been two peaks or drives and now three evenly spaced bottoms. A third drive higher takes this to about 19.80 with a target of about March 10th.
4. The Bullish Relative Strength Index (RSI). The RSI has also been making higher highs and higher lows, with the last two lows holding at the mid line and in bullish territory.
5. The Rising 50 Day Simple Moving Average (SMA). Price crossed the 50 day SMA in December before it was retested and acted as support at year end. Since then it has been rising and Tuesday crossed up through the 100 day SMA. It is now on a path to print a Golden Cross, through the 200 day SMA, in mid March.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Top Trade Ideas for the Week of December 22, 2014: The Best
- SPY Trends and Influencers December 20, 2014
- Macro Week in Review/Preview December 19, 2014
- Dragonfly Capital Views Performance Through December 2014 Expiry
- Charting An S&P 500 March Higher
- Premium Stuff
- Benzinga Morning Prep from December 18, 2014
- Getting a Rise in Dick’s for the Holidays
- Premium Earnings 12-18-14
- Checking Back on Crude Oil