Conclusion, Investment Implications, Strategy
HP Inc. (HPQ) appears to be resuming its February decline following about 6 weeks of sideways investor decision. A sustained decline below the $15.49 area would help confirm this and target an additional 32% decline to $10.00 per share. This is an Asbury Momentum idea.
Analysis and Rationale
HP Inc. (HPQ), together with its subsidiaries, provides personal computing and other access devices, imaging and printing products, and related technologies, solutions, and services in the United States and internationally. The company operates through three segments: Personal Systems, Printing, and Corporate Investments. The company was formerly known as Hewlett-Packard Company and changed its name to HP Inc. in October 2015. HP Inc. was founded in 1939 and is headquartered in Palo Alto, California.
Chart 1 below plots HPQ daily since Q4 2019 and shows that price is currently breaking down lower from about 6 weeks of sideways price activity that is indicative of investor indecision. This recent breakdown suggests the larger late February decline in HPQ is resuming and targets an additional 32% decline to $10.00 per share. This downside target will remain valid as long as the upper boundary of the indecision area, currently situated near $15.40, now loosely contains as overhead resistance.
Table 1 below shows that, considering the aforementioned downside target and a protective stop placed above the $15.49 area, a short entry price of $14.77 would provide a 1:6.6 risk/reward ratio (risking $1.00 to make $6.60) with an initial risk of 4.9%.
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