HPQ Slides 3.61% to $27.50 as Bearish Technicals Signal Extended Consolidation Below $29 Resistance

HP (ticker: HPQ) declined 3.61% in the most recent session, closing at $27.50 with trading volume of 10.19 million shares. This drop extended a consolidation phase below the $29 resistance level observed since late August.
Candlestick Theory
The recent price action shows HP testing key support at $27.46–$27.50, formed by September 24’s low and August 22’s high. Resistance is firmly established near $28.85, aligning with the September 23 high. The 3.61% decline on September 24 manifested as a long bearish candle after a small-bodied green candle (September 23), suggesting distribution near the $28.74–$28.85 resistance zone. A cluster of spinning tops around $28.16–$28.30 (September 17–19) further signals indecision preceding the breakdown.
Moving Average Theory
HP trades below all key moving averages, with the 50-day SMA (∼$28.00) crossing bearishly below the 100-day SMA (∼$28.15) in mid-September. The 200-day SMA (∼$27.80) is now acting as dynamic resistance. This configuration indicates entrenched short-term bearish momentum, though a potential oversold bounce could occur near the rising 200-day SMA if $27.40 support holds.
MACD & KDJ Indicators
The MACD histogram shows sustained negative divergence since early September, with the signal line consistently above the MACD line. KDJ confirms bearish momentum, with the %K line (24) and %D line (29) both below 30 as of September 24. While KDJ’s oversold reading may foreshadow a technical rebound, MACD’s entrenched bearish crossover (signal > MACD) tempers optimism.
Bollinger Bands
September’s price contraction narrowed Bollinger Bands (20-day) to their tightest since July, culminating in a volatility breakout to the downside on September 24. The close near the lower band ($27.20) signals oversold conditions. However, the absence of a bullish reversal candle suggests further downside toward $26.90–$27.00 remains plausible before mean reversion occurs.
Volume-Price Relationship
The breakdown on September 24 saw volume (10.19M shares) exceed the 20-day average (8.32M), validating bearish conviction. Notably, prior rallies (e.g., August 28’s 4.57% gain on 20.14M shares) lacked volume confirmation, signaling weak upside participation. Sustained closes below $27.50 on elevated volume would confirm distribution.
Relative Strength Index (RSI)
The 14-day RSI (36) resides in neutral territory but trends downward from its mid-September peak (45). While not yet oversold (<30), this trajectory aligns with bearish momentum. Divergence occurred on September 11–15 as price consolidated near $28.30 while RSI declined from 53 to 47, foreshadowing the current breakdown.
Fibonacci Retracement
Using the swing low of $26.47 (August 20) and peak of $29.55 (September 9), key Fibonacci levels emerge. The 61.8% retracement ($27.48) precisely aligns with September 24’s low of $27.465, offering critical support. A decisive break below exposes the 78.6% level ($26.90). The 38.2% level ($28.45) now caps rebounds.
Confluence and Divergence
Confluence exists at $27.46–$27.50, where Fibonacci support, Bollinger Band lower boundary, and horizontal price support intersect. Divergence is evident between oversold KDJ readings (bullish) and the bearish MACD crossover. Volume confirmation of the breakdown adds credence to near-term bearish pressure, while RSI neutrality warrants caution against premature reversal calls. The $26.90–$27.00 zone remains the next critical test, with a close below signaling a retest of the August lows near $26.47.