Hewlett-Packard Stock Spikes on CEO Ousting News

2-minute Hewlett-Packard stock chart (EET timezone)

6.7% gain and 6 million shares in 2 minutes’ time was the immediate response of the stock market on news regarding Hewlett-Packard board’s consideration of ousting CEO Leo Apotheker after less than a year on the job. I was long HPQ stock when the spike in 2-minute chart occurred but having already set a profit target led to small profits. The news came just as the Hewlett-Packard’s stock price was approaching the support level at $22, matching the 12-day high. Is that news able to boost HPQ stock price and let an uptrend begin? Maybe since the news are regarded as good news by most and given the positive reaction of the market, although many wouldn’t trust Hewlett-Packard’s future in the hands of the former eBay CEO, Meg Whitman.

 It is more than obvious when Bloomberg, Reuters and other news agencies put up the story about Hewlett-Packard. The volume of HPW stock up to that moment was some thousands shares per minute traded. The liquidity picked up from that point and hit 84M shares on the close of the trading session. That was the fourth biggest day in terms of volume in the last 6 months, after a 6-month high of 120M shares on 19^th of August.

I happened to be long HPQ 500 shares at 22.34. My stop loss was at 22.14 risking no more than $100 on that trade. Had I not traded out at 22.54 automatically, the trade’s profit would have now been $830 on the close. Earlier on the day the profit would have been maximized when the stock price hit $25 per share for a nice $1,330 profit. If only I hadn’t submitted a profit target order, or at least close out half of the position at that level.

Lesson learnt: Don’t trade out automatically your whole position. Let profits come, in case you have picked one of the biggest gainers of the day! Also news can make tremendous impact on the stock charts even in intraday trading like Hewlett-Packard.