After peaking in the summer of 2000, the stock came back down to earth with the burst of the Internet bubble, bottoming out in late summer/early fall of 2002. From there — right along with the broader market, and at least partially in thanks to the Greenspan low-interest-rate policy — the stock managed to reinvigorate itself so much so that by October 2007 it had retraced/made up roughly 70% of its selloff from the summer 2000 peak.
Ultimately, the financial crisis weighed on the stock and led to a significant beating of HPQ, but again Hewlett-Packard managed to synch itself with the broader market and began its next bounce in early 2009. This next bounce — which, from this longer-term point of view, might have been the most important one — managed to marginally record a higher high vs. the 2007 highs, but only served as a double top. After a massive selloff from the 2010 highs — which came as a result from the company’s plagues with CEO issues as well as the further commoditization of personal computers — the stock retested its 2002 lows again in November 2012, from where the next bounce occurred.
Not surprisingly, and much in line with what I described above, Hewlett-Packard again bounced off the November 2012 lows with great correlation to the S&P 500. In late May, this latest rally finally brought the stock up to a resistance area that dates back to March 2012, right around the $25.30 area. During the past few weeks now, the stock has been trading in a tight range, right up at the $25.30 resistance area.
If the stock manages to break past this level on a daily closing basis, then given the duration of the resistance area, the odds favor the stock to lift toward the $29 area.