Dell, Hewlett Packard Struggle to Survive the Apple Age
Last Friday, I suggested that “DELL’s Tuesday announcement could catalyze selling”. And given the stock’s drop of more than 5% in Wednesday’s session after the company’s relatively disappointing earnings report, we can say with some certainty that selling has been catalyzed.
Down big at midweek, shares of Dell (NASDAQ: DELL) are now trading in technically oversold territory above the 200-day moving average – and for the first time this year. The stock is freshly off new, 52-week highs and whatever disappointment investors may be expressing about the company’s prospects in the selling on Wednesday is likely mixed in with a healthy amount of not-so-glum profit-taking after what has been a very impressive run in the stock over the past few months.
That said, recent selling in DELL will give traders another shot at capital appreciation in the old school PC maker. Technically oversold, shares of Dell have earned “consider buying” ratings of 8 out of 10, representing a two-point upgrade from the stock’s opening rating Wednesday morning. DELL also has a positive edge in the short-term of nearly than one and a half percent.
Reporting quarterly earnings after the bell on Wednesday, Hewlett-Packard (NYSE: HPQ) is another old school tech stock that traders will be focused on this week. HPQ has been trading in bear market territory for months, and has recently pulled back from its last rally into overbought territory beneath the 200-day moving average. As of end of day on Wednesday, shares of HPQ had closed lower for three days in a row – down more than 1% on Wednesday alone – and were back in neutral territory, albeit with a modest bias to the oversold.
Here, what has been most interesting is the way the stock has sold off after becoming overbought last week during HPQ’s break back into bull market territory. HPQ had earned “consider avoiding” ratings of 3 out of 10 on Friday, just the stock began to roll over. Shares of HPQ now are down by more than one and three-quarters percent from HPQ’s downgrade to “consider avoiding” status.
Trading lower by more than three-quarters of a percent afterhours on Wednesday, shares of HPQ are set to open Thursday morning with 5 out of 10 ratings and a neglible edge of a quarter of a percent to the positive. Wednesday’s pullback also represents the stock’s third close in a row back beneath the 200-day moving average.
Be sure to read our latest from 7 Stocks You Need to Know: “Buying the Selling in Weight Watchers”.
David Penn is Editor in Chief of TradingMarkets.com