Hp Analysis
A technical and fundamental anlaysis on HP
Assignment type: Individual
Submitted to:
Dr. Timothy
Submitted by:
Mubashar Javaid Chaudhry Submitted on: 07/01/2013
Faculty of Business, Environment and Society
Table of Contents 1. Introduction 3 2. Technical Analysis 3 3. Fundamental Analysis 16 4. Theoretical Evidence 21 5. Conclusion 24 6. References 25
1. Introduction
Hewlett- Packard, also known as HP, co-founded by Bill Hewlett and Dave Packard in 1947, is a multinational American IT company that offers various products such as laptops, desktops, monitors, accessories, printers, ink and toners, scanners and calculators to small and medium sized businesses, households, as well as large enterprises. HP is currently listed on NYSE (New York Stock Exchange), trading under the ticker HPQ, headquartered in Palo Alto, California, U.S.A. HP is well-known PC manufacturer worldwide, and specializes in developing computing technologies such as data storage, networking hardware, building software solutions for companies and consulting services around its products and partner services. HP has been facing tough competition from IBM, Cisco systems, Dell, Western Digital, Sun Microsystems, Zink imaging and ScienceLogic. It has been actively involved in mergers and acquisitions, such as merger with Compaq in 2002, acquisition of EDS (2008), 3COM (2009) and Palm (2010), resulting in higher revenues, increased market share and providing wider range of products to globalized market. HP organization’s culture is focused on corporate values such as trust, high level of achievement, Integrity, teamwork, flexibility and innovation. The objective of this project is to analyze HP from both fundamental and technical perspective. Various tools will be used to analyze stock price movements and conclude whether HP is good buy or not. 2. Technical Analysis
In this section, we will use various technical tools to analyze HP
Assignment type: Individual
Submitted to:
Dr. Timothy
Submitted by:
Mubashar Javaid Chaudhry Submitted on: 07/01/2013
Faculty of Business, Environment and Society
Table of Contents 1. Introduction 3 2. Technical Analysis 3 3. Fundamental Analysis 16 4. Theoretical Evidence 21 5. Conclusion 24 6. References 25
1. Introduction
Hewlett- Packard, also known as HP, co-founded by Bill Hewlett and Dave Packard in 1947, is a multinational American IT company that offers various products such as laptops, desktops, monitors, accessories, printers, ink and toners, scanners and calculators to small and medium sized businesses, households, as well as large enterprises. HP is currently listed on NYSE (New York Stock Exchange), trading under the ticker HPQ, headquartered in Palo Alto, California, U.S.A. HP is well-known PC manufacturer worldwide, and specializes in developing computing technologies such as data storage, networking hardware, building software solutions for companies and consulting services around its products and partner services. HP has been facing tough competition from IBM, Cisco systems, Dell, Western Digital, Sun Microsystems, Zink imaging and ScienceLogic. It has been actively involved in mergers and acquisitions, such as merger with Compaq in 2002, acquisition of EDS (2008), 3COM (2009) and Palm (2010), resulting in higher revenues, increased market share and providing wider range of products to globalized market. HP organization’s culture is focused on corporate values such as trust, high level of achievement, Integrity, teamwork, flexibility and innovation. The objective of this project is to analyze HP from both fundamental and technical perspective. Various tools will be used to analyze stock price movements and conclude whether HP is good buy or not. 2. Technical Analysis
In this section, we will use various technical tools to analyze HP
References: 25 1. Introduction Hewlett- Packard, also known as HP, co-founded by Bill Hewlett and Dave Packard in 1947, is a multinational American IT company that offers various products such as laptops, desktops, monitors, accessories, printers, ink and toners, scanners and calculators to small and medium sized businesses, households, as well as large enterprises. HP is currently listed on NYSE (New York Stock Exchange), trading under the ticker HPQ, headquartered in Palo Alto, California, U.S.A. HP is well-known PC manufacturer worldwide, and specializes in developing computing technologies such as data storage, networking hardware, building software solutions for companies and consulting services around its products and partner services. HP has been facing tough competition from IBM, Cisco systems, Dell, Western Digital, Sun Microsystems, Zink imaging and ScienceLogic. It has been actively involved in mergers and acquisitions, such as merger with Compaq in 2002, acquisition of EDS (2008), 3COM (2009) and Palm (2010), resulting in higher revenues, increased market share and providing wider range of products to globalized market. HP organization’s culture is focused on corporate values such as trust, high level of achievement, Integrity, teamwork, flexibility and innovation. The objective of this project is to analyze HP from both fundamental and technical perspective. Various tools will be used to analyze stock price movements and conclude whether HP is good buy or not. 2. Technical Analysis In this section, we will use various technical tools to analyze HP stock prices and decide if traders can take advantage of trading signals by using technical analysis. 3.1 Fibonacci analysis Fibonacci analysis is used to determine support and resistance level and also project price targets. It is also very useful to set stop losses and also determining market entry level. More importantly, Fibonacci analysis helps us to gauge level of risk and tells us in which direction market is going. If we compare HP prices over the last decade, Fibonacci analysis can be applied in the long run. Strong resistance level can be seen at 61.8% retracement level when HP stock price was trading at $52.23 in 2008, and strong support can be seen at $36.42 (38.2 % retracement level) and $26.59 ( 23.8 % retracement level) during 2009-2011. In the case of HP, prices oscillated between 23.8% and 38.2% level during 2006-2010 and hence established a trading range for investors to identify entry and exit points. As soon HP stock price broke below 23.8% level in 2012, most investors exited from the market and there was heavy volume at that level identifying strong bear trend. $26.59 is major resistance level for HP stock now. Unless HP stock price break above new resistance level, bear forces are in play. Based on Fibonacci analysis, I expect HP prices to go further down and it may find strong support at $10.71 and bargain hunters would be looking to buy HP at that level. If HP prices breach $10.71 level in coming months, it is not recommended a good buy and investors who are holding the stock at the moment must exit immediately.