This article replaces an earlier version in light of today's CSC price action in reaction to the HPE spinoff.
Shares of Computer Sciences Corp. (CSC) are up sharply this morning in reaction to news that Hewlett Packard Enterprise (HPE) will spin off and merge its services division with CSC. With CSC trading up to $47 on this morning's news, a closer look is warranted.
The above is a point and figure (P&F) chart of CSC. This kind of chart only looks at price and ignores volume. Unlike like other kinds of charts (line charts, bar charts, candlestick charts) this chart is only updated when prices move a certain amount.
Here on CSC we only plot movements of $1 or more. One of the advantages of a P&F chart is it can project long-term price targets. At the top of the chart is a price target of $58. Can CSC reach $58? With prices clearing the highs going back to 2001 you never know. I will leave that forecast to the fundamental analysts.