It is not even Hewlett Packard anymore, but it still follows the Elliott Wave path
Our last post about Hewlett Packard was published on August 26th, 2015. Since that time, the company split in two separate entities – HP Inc., selling personal computers and printers, and Hewlett Packard Enterprise, which focuses on storage, servers, security and other corporate services. As a result, the company’s stock also split in two, each having its own trading symbol on the NYSE.
But in August, 2015, a few months before the split, HPQ stock was trading close to $25.60 a share, after a significant decline from as high as $41.08. However, the Elliott Wave analysis of the weekly chart of Hewlett Packard stock shown below suggested a major rally was around the corner.
The simple logic behind this bullish outlook was dictated by the Wave Principle, which says that once the 5-3 wave cycle is complete, the trend resumes in the direction of the five-wave sequence, called an impulse. In other words, almost 2 years ago, the stock of Hewlett Packard Co., now HP Inc., looked very cheap. In split-adjusted prices, it is now trading above $19.20 per share. The following updated chart shows how things went.
In the long run, the bulls were supposed to lift the price of the stock above the top at $41.08, which now corresponds to $18.66. HPQ stock exceeded this key mark two weeks ago. The last time the price was this high was in February, 2011. Should investors start to worry about an upcoming correction? In our opinion, not yet, since the wave structure of wave C does not look like a complete impulse. This means HPQ stock should continue to the north for a while. The price area between $22 and $23 a share is a reasonable target.