HPQ Will Reverse Course

hp

HPQ was pounded last week after holding their Securities Analyst Meeting. The stock dropped to prices it hasn't seen since 2003, almost 10 years ago. Analysts hit the stock with a host of downgrades and new price targets, some as low as $10 a share. Pure brilliance to go out on a limb and downgrade a stock that has dropped from over $50 to $14 in over a year. Really? Do you have to go to college for that? It's like the weatherman issuing a hurricane watch while your paddling down your street in a canoe. A little late ehhh? Or shall we say better late than never. Even a broken clock is right twice a day.

Here are some of those brilliant analysts:

Deutsche Bank cut their PT to $10
Goldman lowered their 12-month price target to $16 from $20.
BMO is lowered their target price to $18 from $23
Sterne Agee lowered HPQ to a $21 price target.

HPQ will recover, it may take time, and it may not last, but HPQ will go back over $20. Ultimately if HPQ does not right the ship the company is going the way of Kodak, but they still have plenty of time and I think this sell-off is over done.

I am looking, and trading, for a move back to $17. I am trading out of the money calls specifically the $14 and $14.50 strike. I am in this weeks $14 & $14.50 calls as well as next weeks $14 and $14.50 calls.

Next Weeks Oct 20 $14 calls are $.46 offer and $14.50 $.20 offer at today's close.

I am looking for a very strong pop the next few trading days and for the stock to reverse its spectacular down trend.

Profile photo of uranium-pinto-beansKnown to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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