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Tech Sector Performance: Update on HP, Intel, AMD, and More

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A look at some of the strongest and weakest names in the technology space.

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MINYANVILLE ORIGINAL Yesterday at ChartLabPro.com we received a lot of emails about our opinion on Hewlett-Packard (NYSE:HPQ). Fortunately, we don't have opinions; we leave that to the sell side fundamental analysts on the Street. We look, instead, at the price and quantitative facts using our proprietary algorithm.

We all know the macro landscape issues as far as the hardware and PC space is concerened, and about the contraction in growth due to the disruption from tablets and mobile. With hindsight being 20/20, we can look back and see the damage that's been done to this sector in a relatively short period of time. The real question is, how can you forecast the real value of these companies going forward? We'll let you in on a little secret: No one can forecast the value going out the next 12 to 24 months on these companies.

Back on August 24, we alerted readers that Intel (NASDAQ:INTC) moved to a Strong Sell (1 Rating) (see Stock Alert: Three Long, Three Short for August 24). As you can see from the charts below, this group -- Intel, Hewlett-Packard, Dell (NASDAQ:DELL), and Advanced Micro Devices (NYSE:AMD) -- has been a true cost of capital and a value trap. At this juncture you most likely missed your opportunity to start a short position. The takeaway is that you cannot buy the dips and hope for a bounce. Until we start to see these names move back to a Hold (3 Rating), we would not waste precious investment capital on them.

As you can see from the HP chart below, since the first Strong Sell (1 Rating) initiated, the name is down 40% and had two brief moves to Sells. Bottom line: Price leads fundamentals; trying to figure out the long term value of these companies is a low probability trade/investment.


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No positions in stocks mentioned.
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