HPQ has had a very quiet four weeks. The stock has been moving sideways in a very tight range since Feb. 24. The day before this current consolidation began, the stock surged over 8.5% on its heaviest trade since last summer. HPQ appears to be on the verge of a second post-earnings rally leg.
The Feb. 23 breakout, which lifted shares past the 2016 high, carried a ton of momentum with it. The stock looked poised for a retest of the 2015 peak as the breakout developed. Instead, HPQ began to move sideways as it worked off an extremely overbought MACD (moving average convergence/divergence) reading. HPQ gave back little ground during that phase as resistance near the February high intensified. If investors can drive the stock past this key level, it has plenty of room to run higher.
In the near term, investors should consider the stock a low-risk buy near current levels. Just above Thursday's high is the February peak. A convincing take out of that level ($17.80) would end the consolidation pattern with an upside breakout. The next target would be the stock's 2015 high. On the downside, a close back below $17.00 would violate the March low indicating more sideways action will be needed before HPQ it ready to enter a fresh rally phase.