HPE's Post-Earnings Rise Could Be Short-Lived

Now might be a good time to weigh in with puts

Deputy Editor
Mar 4, 2024 at 3:24 PM
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Hewlett-Packard Enterprise Inc (NYSE:HPE) is soaring today, up 9.5% at $17.04 at last look, and extending Friday's post-earnings rise. The stock slipped immediately following the company's mixed fiscal first-quarter results and a disappointing second-quarter forecast, but finished the day with a 2.2% rise. Now, the shares are holding on to a slim 0.8% year-to-date lead. 

For those betting on a correction, however, HPE's rally has it running into pressure on the charts. According to Schaeffer's Senior Quantitative Analyst Rocky White, Hewlett-Packard stock is within one standard deviation of its 80- and 100-day moving averages. The equity has seen seven similar signals from its 80-day trendline, after which the stock was negative one month later 57% of the time, averaging a 1.3% loss. Its 100-day trendline flashed six times, and the stock was negative one month later 50% of the time, averaging a 1.7% drop.   

HPE March4

An unwinding of optimism in the options pits could provide tailwinds, too. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), HPE's 50-day call/put volume ratio of 9.57 ranks higher than 98% of readings from the past year. 

When weighing in on Hewlett-Packard stock, options look like a good way to go. The equity's Schaeffer's Volatility Index (SVI) of 26% ranks in the 14th percentile of its annual range, meaning options traders are pricing in low volatility expectations at the moment. 

 

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