Watching HPQ drop 3% so far today promped me to examine the recent price history of that otherwise stellar firm to see what might be up, especially since both Raymond James and UBS rate it either a strong buy or a buy. While all anecdotal of course this is my take looking at the 65 minute bars starting at August 3rd through this morning.
A-B: Insiders get wind of the Mark Hurd debacle about to unfold and start loading up on puts. In addition, there is a small rise in volume as modest stock distribution transpires, but most of that is hidden from public view through back channel trading. B-C: Goldman pumps the stock up with great expectations on little volume. C: the announcment of Hurd’s folly is followed by an immediate $3.50 drop. C-D: HPQ and major institutional holders make bold front and claim little imact to ongoing company operations. D-E: nobody believes it and HPQ drop another $2 on heavy selling. E-F: Continuing assurances by the company and analysts imply the worst is over and viable replacement CEO can be found. Company prospects appear to improve as uncertainty is mitigated. Stock accumulation develops on double normal hourly volume. F-G: (Thursday) several funds dump their positions initiating a downdraft in the price and weak hands sensing uncertainty again with the company’s future cut their losses and exit. The last hours of the day reflect some hope that the worst is over for this otherwise badly oversold stock but low volume indicates it’s not a widely shared view. G: Expiration Friday and the big money wants this risk out of their portfolios so they can rebalance with something a bit more encouraging come 10/1. HFT programs are happy to kick in and drive the stock’s momentum relentlessly down to and through the S2 intraday pivot. And the story continues……
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