HPQ Hewlett-Packard Daily Chart Oversold Falling Wedge Positive Divergence Potential Inverted H&S Pattern

HPQ committed hari-kari over the last month with lower guidance moving forward. Immediately, pundits ran to the air waves to pronounce the death of the PC. The talking heads say desktops, and laptops for that matter, are going the way of the dodo bird and we will move forward with tablets and Smartphones.  The death of the PC is greatly exaggerated.  One of the problems is the weak recovery. In all previous economic recoveries, offices are bringing on employees like gangbusters, the office halls would be littered with DELL and HPQ boxes as the IT employees staged brand new computers in cubicles, and a new upgrade cycle to handle the multi-year recovery lay ahead. Alas, that is not the case now. Companies are barely squeaking by now under the increased regluations, sick disinflationary economy, QE that has lost its effectiveness, and business-unfriendly environment that is now locked in place moving forward.

Once a recovery does occur, the PC's will once again roll out the door. If the shift has now occurred to tablets and Smartphone's that does not show up in the sales data there either, reinforcing the idea that the weak economy is simply dictating the weak DELL and HPQ numbers. The news of the death of the PC reverberated thru markets and with traders looking for stocks to sell, the tech sector was now a huge target with AMD, INTC, MRVL and many other receiving severe beating behind the wood shed.

The daily and weekly charts for HPQ are very attractive with positive divergence in place. Meg Whitman is a top shelf manager and she likely wanted to see the stock beat into oblivion since now she will have easy comps to beat for several quarters forward.  The blue lines show a potential inverted head and shoulders pattern developing; head at 13.5-ish, neckline at 15, it will need a right shoulder at some point, but a price move above 15 would set a target of 16.5 in play.  The worst appears over for HPQ, sometimes the best thing about receiving a beating beyond recognition is that once you are laying on the floor, everything can only get better from there.  Keystone is in HPQ on th elong side.  Projection is for a bounce in price at any time and sustainable sideways to sideways up action moving forward, and, the death of the PC is greatly exaggerated. All that needs to happen is a recovery so the PC refresh cycle can properly occur, but this may be a ways out still yet. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.