Hewlett Packard Stock Remains Bearish After Earnings ReleaseYesterday, the tech giant released its quarterly earnings, showing that sales remained steady at $7.85 billion versus the expected $7.82 billion , while earnings per share came in at $0.49 , aligning with market expectations. However, what is currently weighing on the stock is the company's announcement of a new essential plan to lay off approximately 2,500 employees over the next 18 months. This event has created a low-growth outlook for the stock, which could sustain downward pressure in the short term.
New Bearish Channel:
Since the last days of January 2024, a significant bearish channel has been forming, which has now become more defined following the earnings report. The stock has started marking levels below $18 , reinforcing the downward trend. If the price continues to maintain a consistent bearish bias, the channel could extend further in the upcoming trading sessions.
Possible Oversold Condition:
The RSI line has consistently oscillated below the 30 level , indicating a clear oversold zone in the market. This may suggest an imbalance between buying and selling pressure in the short term.
At the same time, the MACD histogram has begun showing bearish values that have not been seen since early February, demonstrating a steady acceleration of the price decline as selling pressure gains control.
Additionally, the price has crossed below the lower Bollinger Band in recent oscillations, suggesting a potential exhaustion of the downward movement.
All technical indicators signal a potential overselling scenario due to the rapid price drop. That said, this could lead to short-term buying corrections.
Key Levels:
$21.41: A key resistance zone aligning with the 100-period simple moving average. If the price moves above this level, it could pose a threat to the current bearish channel, potentially reviving buying momentum.
$19.45: A nearby resistance level, aligning with October 2024 lows. This could be a tentative zone where potential bullish corrections might occur in the short term.
$16.89 : A critical support level, marking the lowest levels of 2024. This could be the final barrier for the current bearish channel. If the price breaks below this level, it could reinforce the long-term bearish trend.
By Julian Pineda, CFA – Market Analyst