HPQ’s stock is down 2.5% this week, aligning with a well-established historical pattern where declines before earnings lead to stronger rebounds afterward. Data shows that post-earnings returns are often twice the pre-earnings move in the opposite direction, suggesting a potential 5% rally.

HPQ shows a strong reversion in stock price before and after earnings.

The pattern almost always holds, with the post-earnings slope often greater than 2, meaning the return afterward is twice the return before, but in the opposite direction.

The stock is down 2.5% this week, which, based on historical patterns, suggests a 5% upward move.

This is significant, with the implied move from options sitting at 7% in either direction.

Short interest is up 5%, which, according to historical regression, is also a bullish signal.

Short interest has risen recently as the stock has fallen, further supporting the case for a potential reversal.

HPQ’s short position is negatively correlated with the stock price with investors covering on the way up and shorting on the way down.

HPQ’s historical price-action patterns and rising short interest suggest potential rally post-earnings. If history holds, the recent sell-off could set the stage for a significant upward move. Investors should weigh these signals as they position themselves ahead of earnings.

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