NEW DIRECTIONAL CALL PLAYS
Hewlett-Packard Co. - HPQ - close: 28.12 change: +0.44
Stop Loss: 26.75
Current Option Gain/Loss: Unopened
Time Frame: 3 to 4 weeks
New Positions: Yes, see below
Why We Like It:
Shares of HPQ look poised to breakout past resistance near $28.50 after spending weeks building a bottom. Arguably the long-term trend is still down but investors could be betting that the new CEO Meg Whitman can turn the company around (again).
I am suggesting a trigger to buy calls at $28.65. However, this is an aggressive entry point. The top of the August gap down near $29.50 could be resistance. Plus HPQ could find round-number resistance at $30.00 and technical resistance at the 150-dma, simple 200-dma and exponential 200-dma all above in the $30.00-34.00 zone. Thus we want to keep our position size small to limit our risk. We'll se our stop loss at $26.75 and our exit target at $32.00.
FYI: The Point & Figure chart for HPQ is bullish with a $41 target.
Trigger @ $28.65
- Suggested Positions -
buy the 2012Jan $30 call (HPQ1221A30) ask $0.72
Entry on December xx at $ xx.xx
Earnings Date 02/22/12 (unconfirmed)
Average Daily Volume = 22.4 million
Listed on December 05, 2011