HP shares shot up 5.7% Tuesday after the company in a letter to shareholders offered billions in shareholder returns if they would reject a takeover bid by smaller tech company Xerox.
XWhen looking for the best stocks to buy and watch, focus on those with rising relative price strength.
One stock that fits that bill is HP Inc. (HPQ), which had its Relative Strength (RS) Rating upgraded from 73 to 86 Wednesday.
In a letter to shareholders released Monday, HP President and CEO Enrique Lores said, "Our commitment to HP shareholders is unwavering and it's abundantly clear the revised Xerox proposal meaningfully undervalues HP, creates significant risk and compromises the future of our company." HP shares eased fractionally Wednesday midday to 23.30
HP, a maker of computers and software, has climbed more than 5% past a 21.77 entry in a first-stage cup with handle, meaning it's now out of a proper buy range. Look for the stock to offer a new chance to get in like a three-weeks tight or pullback to the 50-day or 10-week moving average.
Earnings growth picked up last quarter from 11% to 25%. But sales fell from 0% to -1%.
See How IBD Helps You Make More Money In Stocks
As you try to find the best stocks to buy and watch, be sure to pay attention to relative price strength.
This exclusive rating from Investor's Business Daily identifies share price performance with a 1 (worst) to 99 (best) score. The rating shows how a stock's price performance over the trailing 52 weeks compares to all the other stocks in our database.
Decades of market research shows that the best stocks often have an 80 or better RS Rating in the early stages of their moves.
HP holds the No. 1 rank among its peers in the Computer-Hardware/Peripherals industry group. Xerox (XRX) and Super Micro Computer (SMCI) are also among the group's highest-rated stocks.
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