We present a mid-term investment review of the shares of Hewlett-Packard Co., an American giant in the field of information technology.

The company’s Q2 financials fell short of analysts’ forecasts due to a significant drop in sales, with net revenue down the most at 12.9B dollars, down 21.7% from 2022, and net earnings per share, which hit 0.8 dollars, 31.0% less than last year’s value. Losses in the Personal Systems and Printing divisions were among the main reasons for the negative dynamics: net revenue in the personal systems category was 8.2B dollars, down 29.0%, while for the consumer systems sector, it fell 39.0%, and for the commercial sector — by 24%. Results in the print category were significantly better, reaching 4.7B dollars, 5.0% lower than previously, with a loss of 19.0% in the consumer segment but up 5.0% in the commercial segment. Considering the significant discrepancy from initial forecasts, Q3 expectations were made, with GAAP diluted EPS in the range of 0.61–0.71 dollars, well below 1.07 dollars in the second quarter, and the similar non-GAAP figure of 0.81–0.91 dollars, slightly above 0.80 dollars previously.

Low dividends still do not contribute to the demand for the issuer’s securities: at the end of June, the board of directors of the corporation approved the fourth, last this year, payment of 0.2625 dollars per share, which corresponds to 1.05 dollars YoY. It is scheduled for October 4, and the yield may be about 3.2% YoY, significantly lagging behind the leaders of the sector, whose indicators reach 6.0–7.0% YoY. After that, there will be a revision toward a possible increase, which in general will not change the situation with low yields.

Also to the underlying fundamental factors, a possible reversal of quotes and negative dynamics soon is signaled by the readings of technical indicators: on the global chart, the price forms a Flag trend continuation pattern, the implementation of which will most likely occur downwards.

For final confidence that the current growth is one of the rising local waves inside the formation, it is necessary to wait for a reversal near the resistance line around 34.80, which coincides with the initial correction level of 23.6% Fibonacci, and subsequent consolidation below the basic correction level of 38.2 Fibonacci % at 30.80.

We offer key marks for consideration on a daily time interval.

The price has been within the Flag pattern for a long time, and given that the resistance line coincides with the initial correction level of 23.6% Fibonacci, its implementation will take place soon. Around the formation resistance line at 34.80, there is a sell signal cancellation zone, and in case of a price reversal near the support line, growth, and upward exit from the pattern, it is better to liquidate open short positions. Around 24.00, which is at a full correction of 61.8% by Fibonacci, there is the target zone, after reaching which it is better to take profit on open sell positions.

In more detail, entry into transactions may be evaluated on the four-hour chart.

The entry level for sell trades is near the 38.2% Fibonacci base correction level of 30.80, which is also the pattern’s support line. Given the relative distance of the current quote from it, a local signal can be received within the next 8–10 days after the breakdown and consolidation below the low, after which there will be no significant support on the way to the target level of 24.00, and the positions can be realized.

Given the nature of the underlying fundamental factors and the average daily volatility of the trading instrument over the past month, which is 28 points, the movement of quotes to the target zone of 24.00 may take approximately 52 trading sessions.