Hewlett Packard Enterprise Co. (HPE) is getting a bid this morning in reaction to a beat on top and bottom lines in its latest quarterly earnings report released last evening. I will leave the number crunching of revenues and earnings and the nuances of that thing called guidance to others, and just concentrate on the charts and indicators.
In this daily bar chart of HPE, below, we can now see a more positive looking alignment of prices and indicators than we have seen in several months.
Prices are above the rising 50-day simple moving average line and the bullishly sloped 200-day moving average line. An uptrend has been established this month when prices made higher highs and higher lows from the nadir in early July.
The daily On-Balance-Volume (OBV) line is making a new high for the year and the recent move up from early July.
The trend-following Moving Average Convergence Divergence (MACD) oscillator finally moved above the zero line earlier this month for an outright go long buy signal. The last buy signal was back in early December.
In this weekly bar chart of HPE, below, we can see the price action going back to late 2015. Prices have more than doubled in that time frame and we can see that HPE is trading above the rising 40-week moving average line.
The trading volume has slowed the past few months even as prices have advanced - this is not the best picture of price and volume. Chart watchers like to see volume increase with the trend.
The MACD oscillator crossed to the upside this month for a cover shorts buy signal or a buy in a downtrend.
In this Point and Figure chart of HPE, below, we can see two key items - a trade at $17.08 will be a small double top breakout and there is a modest upside price target of $18.28.
Bottom line strategy: Traders could operate from the long side on HPE. Buy strength above $17.08 and risk below $15.25. Look for a rally back to the $18.50-$19.00 area.
