HP Inc. (NYSE: HPQ) seems to be poised for a price surge as per its latest charts. The company 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.
Bullish Indications
#1 Formation Of a Consolidation area: The daily chart shows that the stock has been consolidating within a price range for the past few days. This area is marked as an orange color rectangle. The stock currently looks poised for a breakout from this consolidation area. Once a stock breaks out of a consolidation area, it typically moves higher.
HPQ – Daily Chart
#2 Price above MAs: The price is currently above the short-term moving average of 50-day SMA as well as the longer-term moving average of 200-day SMA, indicating that the bulls are still in control. This is a positive indication.
#3 MACD Above Signal Line: In the daily chart, the MACD line (light blue color) is currently above the MACD signal line (orange color) which is typically considered bullish.
#4 Bullish ADX: The ADX indicator shows that the +DI line is currently above the –DI line and the ADX line has started to move up from below –DI and +DI lines. This indicates possible bullishness.
#5 Bullish RSI: In the daily chart, the RSI is currently above 50 and moving higher. This is a possible bullish sign.
#6 Ascending Triangle Pattern: The weekly chart shows that the stock has currently formed an Ascending Triangle pattern. An Ascending Triangle pattern is a bullish pattern. This is marked on the daily chart in purple color lines. A breakout from this pattern typically indicates bullishness. The base of the triangle generally acts as a good support level after the breakout. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are firmly in control.
HPQ – Weekly Chart
#7 Bullish RSI: In the weekly chart, the RSI is currently above 50 and moving higher. This is a possible bullish sign.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, you can purchase the shares of HPQ above the price of around $40.70.
TP: Our target prices are $44 and $48 in the next 3-6 months.
SL: To limit risk, place stop-loss at $38.70. Note that the stop-loss is on a closing basis.
Our target potential upside is 8% to 18% in the next 3 to 6 months.
For a risk of $2.00, our target rewards are $3.30 and $7.30. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers nearly 2x to 4x more potential upside than downside.
Risks to Consider
The stock may reverse its overall trend if it breaks down from the consolidation area with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.
Happy Trading!
— Tara
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