Can the Leaders Stay on Top in 2014

Hewlett Packard (NYSE:HPQ) was one of the best performing stocks in 2013 notching up gains of nearly 80%. The question is whether the technology bellwether can continue to perform in the coming year.

This past month JPMorgan Chase upgraded HPQ shares to a buy with a $35 price target. This upgrade comes after the company was one of top performer in 2013, gaining over 93%. Still, JPMorgan believes enough upside remains to buy shares here.

The 52-week range of HPQ is $ 13.60 – $28.70, and the stock hit a 52-week high in early-December. The quarter over quarter earnings per share declined by 13%, while the three year growth rate of earnings was flat. Sales declined 3 percent quarter over quarter and the three-year growth rate of sales was flat. The company has a reasonable price to earnings ratio of 8 and profit margins of 8.5%.

Recent insider buying makes the stock look attractive. Meg Whitman the Chief Executive Officer purchased approximately 55,000 shares of the company stock on December 14th, 2013 for a total value of approximately 1.5 million dollars. Tracy Keogh purchased 31K shares on December 12, for nearly 1 million dollars.

The technical outlook is positive as the stock attempts to test the recent 52-week high near $28.70. Momentum is strong with the MACD (moving average convergence divergence) index generating a buy signal. This occurs when the spread (the 12-day moving average minus the 26-day moving average) crosses above the 9-day moving average of the spread. The RSI (relative strength index) is accelerating with price action printing near 67 which is on the upper end of the neutral range.