November 28 Chart of the Day - HP, Inc.
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HP Inc. (HPQ) is an American multinational information technology company headquartered in Palo Alto, California, that develops personal computers, printers and related supplies, as well as 3D printing solutions.
The company is in the news this week because Warren Buffet's Berkshire Hathaway pared back on its large HP investment during Q3 according to public filings. And because of this we wanted to see the chart that made the "Oracle of Omaha" cut back his holdings.
On its monthly chart we can see that since setting a $41.47 all time high (ATH) in 2021 price back tested a long term trend line that it had previously broke out and above from. This sort of price action is very typical however what came next could be foreshadowing that more downside could be coming because price then set a lower high before falling back towards the trend line again.
Down on the weekly chart we can see that price has been flirting with a change control that is roughly between $24 and $27.
Change control zones are one of the five price action tools we teach when charting anything. By definition, they are an area that represents where neither the bulls nor bears are in charge. Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it. Or, price can trade aimlessly sideways within it. When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.
Additionally, using Fibonacci sequencing we can see a series of lower highs and lower lows in play that could push price down even further from its current $28.52 price.
Technically speaking, $18-20 is in play to the downside while $32-$34 is in play to the upside.
Maybe Mr. Buffet wanted to hedge against price making another lower low by selling part of his HP holdings.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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