Hewlett-Packard stock pulled back to two historically bearish trendlines
Hewlett-Packard Enterprise Inc (NYSE:HPE) is soaring today, up 9.5% at $17.04 at last look, and extending Friday's post-earnings rise. The stock slipped immediately following the company's mixed fiscal first-quarter results and a disappointing second-quarter forecast, but finished the day with a 2.2% rise. Now, the shares are holding on to a slim 0.8% year-to-date lead.
For those betting on a correction, however, HPE's rally has it running into pressure on the charts. According to Schaeffer's Senior Quantitative Analyst Rocky White, Hewlett-Packard stock is within one standard deviation of its 80- and 100-day moving averages. The equity has seen seven similar signals from its 80-day trendline, after which the stock was negative one month later 57% of the time, averaging a 1.3% loss. Its 100-day trendline flashed six times, and the stock was negative one month later 50% of the time, averaging a 1.7% drop.
An unwinding of optimism in the options pits could provide tailwinds, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HPE's 50-day call/put volume ratio of 9.57 ranks higher than 98% of readings from the past year.
When weighing in on Hewlett-Packard stock, options look like a good way to go. The equity's Schaeffer's Volatility Index (SVI) of 26% ranks in the 14th percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment.