Stock Of The Day: Did Hewlett Packard Finally Break Out?

Hewlett Packard Enterprise Company (NYSE:HPE) shares are moving higher on Monday. They had stalled at resistance around the important $25.75 level. But now that this resistance has broken, it could be bullish. This is why we have made Hewlett Packard our Stock of the Day.

As you can see on the chart below, back in September, the shares were in an uptrend. There were more shares to be bought than there were for sale. This forced buyers to outbid each other to attract sellers.

This resulted in the shares trending higher.

When they reached levels around $25.75, the sellers came out of the woodwork. Buyers could purchase all the shares they wanted to without having to push the price any higher.

Then the tide turned.

Some of the sellers became nervous and anxious. They were worried that the buyers would go to someone who would be willing to sell them shares at a lower price. As a result, they reduced their offer prices.

Other nervous sellers saw this and did the same thing. A downtrend formed.

When this happened, many of the people who bought shares around $25.75 regretted doing so. Some of them vowed to sell their shares if they could eventually get out at breakeven.

When Hewlett Packard rallied back to this price in March, these remorseful buyers placed sell orders. There were so many of them that it created resistance at the level again

But now the shares have ‘broken' this resistance. This means the shares are above it.

It also means that the people who created the resistance have either finished or canceled their sell orders. With these sellers out of the way, buyers will once again outbid each other to draw sellers back.

This means Hewlett Packard may be about to rally. A new uptrend may be forming.

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