HPQ closes above its opening price after recovering from early selling pressure
Hewlett-Packard (HPQ) Technical Analysis Report for Oct 12, 2018
HPQ ended the week -6.59% lower at 23.67 after gaining $0.66 (2.87%) today, notably outperforming the S&P 500 (1.42%). Trading up to $0.19 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. The last time this happened on September 19th, HPQ gained 1.70% on the following trading day. Closing within the previous day's range, prices failed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (HPQ as at Oct 12, 2018):
Friday's trading range has been $0.49 (2.09%), that's slightly below the last trading month's daily average range of $0.52. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for HPQ.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar. After moving lower in the prior session, the stock managed to close higher but below the previous day's open, forming a bullish Harami Candle.
Hewlett-Packard managed to break above the 200-day moving average at 23.10 today. Prices are trading close to the key technical resistance level at 23.77 (R1).
With another close below the lower Bollinger Band, prices are confirming their strong downward momentum in the short-term. A rally back into the Bollinger Band on the next trading day although might signal a potential change in momentum that could lead to a correction back up towards the center of the Bollinger Bands at 25.31.
While the market is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close below the lower Bollinger Band" stand out. Its common bearish interpretation has been confirmed for Hewlett-Packard. Out of 145 times, HPQ closed lower 50.34% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 54.48% with an average market move of -0.46%.