4 Trade Ideas in HP: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

HP, $HPQ, was moving up in a rising channel until it stalled in November. The rise morphed into a sideways consolidation which held until the end of February. Then it gapped higher and settled into a new consolidation range. The flat tight range ran for 2 months until it broke out to the upside last week. The Thursday move pulled back Friday, but held the break out. A Measured Move would give a target to the upside to 20.

The RSI is rising in the bullish zone and strong. The MACD is about to cross up, a bullish signal itself. There is resistance at 18.50 both here and from the beginning of 2015, then 19.75 and 22 followed by 24.50. Support lower comes at 17.85 and 17 followed by 16.25. Short interest is low at 1.6% and the company is expected to report earnings next on May 25th.

The stock has weekly options and this week the majority of the open interest is below the current price. There is large open interest at the 18.50 strike on the call side, but then it is big from 14 to 18 below. May options show size from 16 to 18 on the call side with a big chunk at the 16 puts. The May 26 Expiry options, the first after the next earnings report, are just getting started and have little activity so far. So a look at the June options shows the open interest at the 18 call strike dwarfing all other activity by a factor of 15x.

HP, Ticker: $HPQ

Trade Idea 1: Buy the stock on a move over 18.50 with a stop at 17.75.

Trade Idea 2: Buy the stock on a move over 18.50 with a May 26 Expiry 18/17 Put Spread (40 cents) and selling a June 20 Call (24 cent credit).

Trade Idea 3: Buy the May 18 bullish Risk Reversal (29 cents).

Trade Idea 4: Buy the June 18/May 19 Call Diagonal (79 cents).

Premium Content
The Best

The Rest Premium

Free Content
The Rest

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.

If you like what you see sign up for more ideas and deeper analysis using the Get Premium button above.

After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Thursday which with Easter now behind and April options Expiration ahead, sees equity markets looking a bit weaker short term as they give up some ground.

Elsewhere look for Gold to continue in its uptrend while Crude Oil also moves higher. The US Dollar Index has moved into broad consolidation while US Treasuries are biased higher short term and may be reversing. The Shanghai Composite looks to continue to drift higher as Emerging Markets consolidate their recent move up.

Volatility looks to remain low, but higher than it has been and with a short term bias to continue up. This alone should not be enough to put a damper on equities but could contribute. The equity index ETF’s SPY, IWM and QQQ, all look ready to continue to give ground in the short run. In the intermediate view they are all stronger with the QQQ strongest and IWM next and the SPY the least positive. Use this information as you prepare for the coming week and trad’em well.

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
Dragonfly Caps Blog