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Hewlett Packard (HP) Forecast 23 May 2014

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Hewlett Packard Chart 23 May 2014
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Hewlett Packard drops as the second quarter earnings meet expectations

After the company has reported that it is still experiencing difficulties with sales of its product and following the news that Chinese Lenovo brand has increased its sales to the tune enough to overcome Apple as the third largest PC shipment supplier to the US market, today Hewlett Packard (HP) is more likely to cut jobs to reduce costs.

The main reasoning behind the job cuts is that the company's CEO Meg Whitman is still willing to optimize the structure of the tech giant which she has taken the helm of at a very bad time a couple of years ago. She has had to struggle with issues such as the flawed acquisition of the bloated Autonomy company.

A couple of years later, she has turned the company around with the revenue stream for the second quarter coming at $27.3 billion, which resulted in $0.88 earned per every share of HP. That said, the closing competition from Chinese Lenovo, which has acquired IBM's hardware business several years ago is worrying investors.

With more than two years in managing this, Meg Whitman is finally receiving positive feedback from investors, as the shares of the company before the latest numbers were announced have rallied about 14%, when compared to the broad market in the face of the S&P 500 which merely moved higher by 2.4%.

Looking at the chart we see good opportunities to buy calls at current levels for Friday's expiry - $31.20 should be the perfect level for this, as we have had a double bottom in April which still hasn't been conclusively breached.

On the other hand, if we see a break below $31.00 we can count on a protracted fall in prices, eventually reaching down to below $30. However we still see this happening as somewhat unlikely at this point in time. Nevertheless - flexibility is key in the binary options trading of stocks, so make no mistake we will take action if the scenario unfolds.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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