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Is Hewlett-Packard Strong Enough?

ByEWM Interactive
Published 11/19/2014, 05:18 AM
Updated 07/09/2023, 06:31 AM

Hewlett-Packard Company (NYSE:HPQ). stock started its uptrend from 11.34 in November 2012 and is currently trading close to 37.50. More than 26 figures of steady rise in just two years is more than enough to convince the majority of investors, that this stock is a good choice to invest in right now. However, investing decisions should not be based only on rising prices. That is why we use the Elliott Wave Principle. It could tell us not only what the direction of the trend is, but it could also warn us if the trend is in its final stages and a reversal is near. Pay attention to the wave structure of Hewlett-Packard’s rise shown on the chart below.
Hewlett-Packard Weekly Chart
The uptrend seems to be unfolding in a clear five-wave impulsive sequence. According to the Theory, after every impulse, a correction follows. That is the reason why we think Hewlett-Packard is approaching the end of this long journey to the north. There should be a little more power left, which could lead prices up to a new top in wave 5, unless a truncated fifth wave occurs. If this is the correct count, this stock may be able to climb to the $40 mark, only to complete the five-wave rally for wave (1/A). Then, instead of being overoptimistic, we should be preparing for the natural three-wave correction in wave (2/B). In conclusion, investors could be very disappointed, if they buy, when Hewlett-Packard makes a new high, because a reversal to the downside would be very likely.

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