HP reports tonight (30/05/2023) — What to expect? $HPQ analysis

As of 30 May 2023, HP ($HPQ) remains technically bearish long term, within a monthly range of $24 – $34.21. The stock is capped below $34.21 and cannot close above $31.5 on the daily chart. What many read as an imminent bullish breakout looks more like an accumulation of short positions waiting for a catalyst — the earnings release that same evening.

This week, investors will be following the results of several large US companies.

Today, 30 May 2023, HP Inc. ($HPQ) reports its financial results after the close. On Wednesday 31 May, Salesforce ($CRM), CrowdStrike ($CRWD), Chewy ($CHWY) and NetApp ($NTAP) follow. Then on Thursday 1 June: Broadcom ($AVGO), Dollar General ($DG), Lululemon ($LULU), Dell ($DELL), Macy’s ($M) and Zscaler ($ZS).

Let’s analyse $HPQ technically across different timeframes.

Monthly analysis

After breaking down below $26 in 2022, HP is technically bearish over the long term.

The stock is moving within a range between its recent low at $24 and its monthly upper resistance at $34.21.

HP $HPQ monthly chart — May 2023 — $HPQ monthly chart (May 2023)

Weekly analysis

On the weekly chart, HP is in a rather soft short-term uptrend, and has touched the previous July 2022 low at $31 several times.

That uptrend could continue as far as the weekly resistance at $33.8, without calling the underlying downtrend into question.

HP $HPQ weekly chart — May 2023 — $HPQ weekly chart (May 2023)

Daily analysis

The August 2022 gap has been filled and tested multiple times. However, HP cannot manage to close above $31.5 and remains capped by a resistance trendline.

HP $HPQ daily chart — May 2023 — $HPQ daily chart (May 2023)

Technical summary

HP is not technically appealing. The daily chart gives hope to many investors waiting for a bullish breakout of the resistance, driven by the rising support trendline.

EliteProfit sees it rather as an accumulation of short positions waiting for a bearish catalyst — potentially tonight’s results.

HP’s past results

Income statement trend 2018-2023 + forecast

HP’s results have been nothing exceptional for years, even though the company remains profitable:

P/E: around 13
Dividend: 3.33%
Margin: low
Trend: revenue and earnings falling quarter after quarter

It is therefore reasonable to expect the results of this 30/05/2023 to be unexceptional, which would reinforce the technical analysis of the stock and a probable further decline ahead.

Summary of $HPQ technical levels (30 May 2023)

Timeframe	Trend	Support	Resistance
Monthly	Bearish long term since the break below $26 in 2022	$24 (recent low)	$34.21
Weekly	Bullish short term, soft	$31 (July 2022 low)	$33.8
Daily	Capped by a resistance trendline	Rising trendline	$31.5 on a closing basis

Fundamentals as of 30/05/2023: P/E of around 13, dividend of 3.33%, low margin, revenue and earnings declining quarter after quarter.

Frequently asked questions

Should you buy a stock before its earnings release?

That is when risk is highest: the price can open far from the last traded price, beyond a stop-loss. Taking a position before a release means betting on a binary event rather than following a technical setup.

What is an accumulation of short positions?

It is the gradual building of selling positions beneath a resistance level by participants anticipating a decline. Visually it often looks like a compression under a ceiling, which many wrongly interpret as preparation for a bullish breakout.

What is a filled gap in technical analysis?

A gap is a price difference between one session’s close and the next session’s open. It is said to be filled when the price later travels back through that zone. Filling removes the gap’s role as an attraction zone, but is not in itself a directional signal.

Does a high dividend compensate for a downtrend?

Rarely. A 3.33% yield does not cover a share price decline of several tens of percent, and a yield rising mechanically because the price is falling is a warning signal rather than an opportunity.

What does a P/E of 13 mean for a technology stock?

That the market is paying thirteen times annual earnings — a modest multiple for the technology sector. Here it reflects limited growth prospects, consistent with revenue and earnings falling quarter after quarter.

The analyses published on EliteProfit are provided for information purposes and do not constitute investment advice. All stock market investments carry a risk of capital loss. The technical levels and fundamentals mentioned correspond to the situation on 30 May 2023.