Computing and printing systems giant Hewlett-Packard Company (HPQ), much like many of the other box makes such as Dell Inc (DELL), has seen a dramatic demise in its stock price over the past three years. After peaking in the summer of 2000, the stock came back down to earth with the burst of the ‘internet bubble, bottoming out in late summer/early fall of 2002. From there, right along with the broader market and at least partially in thanks to the Greenspan low interest rate policy, the stock managed to reinvigorate itself so much so that by October 2007 it had retraced/made up roughly 70% of its sell-off from the summer 2000 peak. Ultimately the financial crisis too weighed on the stock and led to a significant beating of Hewlett-Packard Company (HPQ), which however again managed to synch itself with the broader market and began its next bounce in early 2009. This next bounce, which from this longer-term point of view may have been the most important one, managed to marginally record a higher high versus the 2007 highs, but ultimately and in hindsight only served as a double top. After a massive sell-off from the 2010 highs, which came as a result from the company’s plagues with CEO issues as well as the further commoditization of personal computers, the stock re-tested its 2002 lows again in November 2012, from where the next bounce occurred.
Not surprisingly, and much in line with what I described above, Hewlett-Packard Company (HPQ) again bounced off the November 2012 lows with great correlation to the S&P 500. In late May this latest rally has finally brought the stock up to a resistance area that dates back to March 2012, right around the $25.30 area. Over the past few weeks now the stock has been trading in a tight range, right up at the $25.30 resistance area. If the stock manages to break past this level on a daily closing basis, then given the duration of the resistance area the odds favor the stock to lift toward the $29 area.
