The "Lightning Round" segment of Mad Money is a viewer favorite. This is the portion of the show when callers can quiz Jim Cramer about individual stocks they have an interest in. One caller Tuesday night asked about Hewlett Packard Enterprise (HPE) : "This one has come back, but now it's time to go," said Cramer.
In our last review of HPE way back on August 26, 2019 we said, "Because prices have been in a decline from late February I am not optimistic about the earnings numbers this week. We could always get a reflex bounce, but I think the risk is on the downside." As things turned out the price of HPE bounced in the summer of 2019 and then plunged sharply lower into the March 2020 lows.
How do things look now?
In this updated daily bar chart of HPE, below, we can see that prices have rallied from early November. Prices are trading above the rising 50-day moving average line as well as the rising 200-day moving average. We can see a bullish golden cross of both averages at the beginning of December. Trading volume has been increasing since the beginning of 2021.
The On-Balance-Volume (OBV) line shows improvement from early November telling us that buyers of HPE have been more aggressive. The Moving Average Convergence Divergence (MACD) oscillator has been bullish since the middle of November.
In this weekly Japanese candlestick chart of HPE, below, we can see what looks like chart resistance around $16 - upper shadows.
The weekly OBV line shows some improvement from November but really not the strongest picture you could hope for.
The 12-week price momentum study shows equal highs in recent weeks when prices were making higher highs. This is a bearish divergence and can be a heads up that the uptrend could reverse gears.
In this daily Point and Figure chart of HPE, below, we can see that prices have reached and exceeded a $14.50 price target. There is some chart resistance at $16.50 and $17.00.
Bottom line strategy: Traders who are long HPE should either take profits or raise sell stops to $14.90.
