For his second Executive Decision segment of Tuesday's "Mad Money" program, host Jim Cramer spoke with Enrique Lores, president and CEO of HP Inc. (HPQ) , the PC, printer and peripheral maker that once again saw strong sales in its fiscal second quarter.
Lores said commercial customers grew by 18% in the PC category last quarter and now account for 65% of HP's total PC sales. The hybrid work environment remains strong, he said, and continues to drive growth for new PCs.
Lores also said he's proud that Warren Buffett has become a shareholder of HP. While he wouldn't share many details of his conversations with the legendary investor, Lores did note that Buffett is a customer and uses an HP laptop.
Let's check out the charts and indicators of HPQ.
In this daily bar chart of HPQ, below, we can see that prices have traded sideways since early December. Within that consolidation pattern we can see a decline the past two months where HPQ retested the rising 200-day moving average line in May. Prices gapped higher the other day, lifting HPQ above the 50-day moving average line and bringing prices within a few dollars of new 52-week highs. The On-Balance-Volume (OBV) line has turned higher from early March and is making a new high ahead of prices. The OBV line can be a leading indicator at times. A rising OBV line happens when buyers are more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator has been hugging the zero line the past three months but looks like it is ready to stay above the zero line.
In this weekly Japanese candlestick chart of HPQ, below, we can see a positive picture. Notice the two lower shadows as prices tested the rising 40-week moving average line? The weekly OBV line has been bullish the past three years and confirms the price gains. The MACD oscillator is above the zero line and poised for an upside crossover and new outright buy signal.
In this daily Point and Figure chart of HPQ, below, we can see an upside price target of $50. A trade at $41.81 will be a breakout.
In this weekly Point and Figure chart of HPQ, below, we can see that the software is projecting a $58 price target.
Bottom line strategy: Aggressive traders could go long HPQ at current levels or on strength above $41. Risk to $36. Our price targets are $50 and then $58.