Petroleum contract drilling company Helmerich & Payne HP was downgraded Wednesday by TheStreet's Quant Ratings service. Let's check the charts and technical indicators to add some color.
In the daily bar chart of HP, below, I see a mixed picture. The shares have traded sideways since April or May, which is not bad in a bear market for most stocks but twin peaks in HP in June and November is another way to view the chart below. Twin peaks, or a double top, is a potential top reversal. HP is currently below the 50-day moving average line and only slightly above the rising 200-day line.
The volume histogram is not bullish and the daily On-Balance-Volume (OBV) line has been in a downward trend from early March. A declining OBV line is the result of heavier trading volume on days when HP closes lower. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In the weekly Japanese candlestick chart of HP, below, a potential double top pattern around $55 is easier to see. The shares are still above the rising 40-week moving average line so we can't turn too bearish just yet.
The weekly OBV line has risen to a new high to confirm the price gains. The MACD oscillator made a lower high in November when compared to May even though prices made equal highs. This is a bearish divergence.
In the daily Point and Figure chart of HP, below, I can see a mixed picture. This chart shows an upside price target in the $58 area but a trade at $45 or $44 is likely to weaken the picture.
In this weekly Point and Figure chart of HP, below, I can see a downside price target in the $36 area.
Bottom-line strategy: All three major investment approaches -- fundamentals, technicals and quantitative analysis -- have value and I would not ignore a quantitative downgrade on HP. Avoid the long side of HP for now.
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