HP Shares Jump 11.7% In Two Days As Technicals Signal Bullish Reversal

Hewlett-Packard (HP) shares surged 4.35% to $28.54 in the latest session, extending gains to 11.70% over two consecutive trading days. This sharp upward movement follows a 5.27% decline on October 10th, demonstrating significant volatility near key technical levels. The analysis below examines this price action through multiple technical frameworks.
Candlestick Theory
Recent candlesticks show a bullish reversal pattern emerging from the October 10th low of $25.55. The subsequent two white candles with higher closes formed a bullish engulfing pattern, indicating strong buying pressure. A key resistance zone materializes near $28.85-29.00, aligning with the September 23rd and September 9th highs. Support is evident at $27.35 (October 13th low), with major structural support at $25.50-25.55.
Moving Average Theory
The 50-day moving average (currently near $27.20) recently provided dynamic support during the early October pullback. The current price trades above this level but remains below the descending 100-day and 200-day moving averages (approximately $28.80 and $29.50, respectively), indicating persistent longer-term bearish pressure. The 50/100-day death cross formation in September continues to weigh on the intermediate trend, though the short-term trend has turned positive following the recent bounce.
MACD & KDJ Indicators
The MACD histogram shows strengthening bullish momentum as the signal line crossover occurred during the October 13th rally. KDJ displays a bullish alignment with the %K line (83) crossing above %D (75) in overbought territory. While both oscillators suggest continued upside potential, the KDJ's overbought reading (J-value at 99) warrants caution for near-term exhaustion, particularly given rapid 11.70% two-day gains. No bearish divergences are evident on either indicator.
Bollinger Bands
Price rebounded sharply from the lower Bollinger Band ($25.50) on October 10th, with the subsequent rally pushing it toward the upper band ($28.90). Bandwidth expanded during the selloff, reflecting increasing volatility. The current upper band converges precisely with the September resistance zone at $28.85-28.90, creating a formidable technical barrier.
Volume-Price Relationship
Bullish confirmation emerged through expanding volume during the advance – 14.1 million shares on October 13th (+40% vs average) and 21.6 million shares on October 14th (52% above average). This volume surge validates the breakout above the $27.35 resistance. Conversely, the October 10th decline occurred on 15.8 million shares, showing climactic selling that often precedes reversals.
Relative Strength Index (RSI)
The 14-day RSI rebounded sharply from oversold (31.5 on October 10th) to 68.2 currently, approaching overbought territory. While the current reading doesn't yet signal immediate danger (RSI can remain elevated in strong trends), it coincides with multiple resistance levels. Traders should monitor for potential bearish divergence if prices advance further without corresponding RSI strength.
Fibonacci Retracement
Applying Fibonacci levels to the September 9th high ($29.55) to October 10th low ($25.55) swing reveals critical thresholds: The 61.8% retracement at $28.02 was decisively breached, while the 78.6% level at $28.69 closely aligns with the current price ($28.54). The 100% extension target sits at $29.55. These levels form confluence with horizontal resistance near $28.85.
Confluence & Divergence
Multiple indicators converge at the $28.69-28.90 resistance zone: the 78.6% Fibonacci level, upper Bollinger Band, September swing highs, and descending 100-day MA all intersect here. Bullish confirmation appears in volume expansion, MACD crossover, and moving average support. The only potential concern emerges from the overbought KDJ and near-overbought RSI readings occurring near technical resistance, though no bearish divergences currently exist. A decisive close above $28.90 would signal strength toward $29.55, while rejection here could trigger profit-taking toward $27.35 support.