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Hewlett-Packard (NYSE:HPQ) shares could be one of the most unloved in the tech sector today and that is saying plenty, especially since even favorites like Apple (NASDAQ:AAPL) are now in correction territory. Many other tech bellwethers such as Microsoft (NASDAQ:MSFT) Advanced Micro Devices (NYSE:AMD) and Intel (NASDAQ:INTC) have also been slammed in recent days and now trade near 52-week lows. While there is no doubt that the lack of growth in PC sales is impacting Hewlett-Packard and many other tech companies, it also seems clear that shorts and investors have become excessively bearish. When investors and shorts get carried away it can lead to exaggerated moves both to the upside and downside. Remember when investors believed stocks like Netflix (NASDAQ:NFLX) were worth buying at about $300 per share when everything was looking great? Or how about Chipotle Mexican Grill (NYSE:CMG) which was pushed to extreme levels at over $440 per share, but now just trade for about half that level.

This shows how upside momentum can takes stocks well above any reasonable value. The same is true with downside momentum. Some of the best examples of downside momentum taking stocks to unreasonably low levels occurred at the height of the financial crisis as many oil and financial sector stocks were turned into penny stocks. Many later rebounded and became double-digit stocks once the negative hysteria hit washout levels, which then allowed stocks to return to fair value levels.

Investment success has so much to do with psychology, and some of the world's wealthiest investors like Warren Buffett have outperformed the average investor by ignoring the current "group think" about a particular stock or the entire market when other investors are selling in fear. Investors need to remember that the market will always give you an opportunity to give your shares away at less than favorable prices.

So many investors are now convinced that Hewlett-Packard shares have little to no investment potential that it has become an easy to hate stock. It seems like an almost daily bashing of the company occurs in the media, and that has helped to push the shares down to 52-week lows. While it is easy to find all the negative reasons for bashing HP, it is rare to see anyone make a bullish case no matter where the stock price is at. Sure it would make sense to beat up on one of the world's largest PC makers if it was trading at $30, $40 or $50 per share as it was not that long ago, but at $13 per share, it's time to consider that there is upside potential and here are a few reasons why:

1. Shorts and investors may have become overly pessimistic. A few years ago when HP shares were trading in the teens, former CEO Mark Hurd started a turnaround that caused the stock to roughly triple in value in just a few short years. Investors and the media that sold the stock at about $15 per share were short sighted and investors who bought when pessimism was reaching a high point could have tripled their money.

2. Part of the current weakness in Hewlett-Packard shares has to do with seasonal selling pressure. This is because HP shares have lost plenty of value in 2012 and this causes many investors and funds to dump the stock in order to harvest tax losses. Investors who have lost money and are tired of hearing that only a "fool" would own such a stock are prone to selling the stock at this time of year as tax loss selling often hits a peak around mid-November through December. That creates a potential buying opportunity. Investors who buy badly beaten-down stocks when this type of seasonal selling hits are often rewarded when they hold the shares at least through January. That is because the excess pressure from tax loss selling evaporates nearly overnight (on January 1) and that means a major amount of cheap shares are suddenly no longer being dumped on the market. Because of this, the stock has a chance to firm up as the supply and demand ratio become more balanced. This sudden stability and even strength can cause a notable rally off the lows. That often causes shorts to realize that the downside momentum is gone and may have been exaggerated. It won't be long before January is here, which could reverse the seasonal weakness and bring in seasonal strength.

3. At about $13 per share, the downside could be limited. It would be hard to find a level-headed short or bear on HP make a case for this stock to go to zero. Perhaps it could go down to $10 or even slightly less if some extremely bad news or a significant market crash where to take place in the next year or two. Whether you take $11, $10, or even a bit less as the (likely) worst-case scenario, at just $13, there no longer appears to be a lot of downside risk at these levels. The stock now trades at about 4 times earnings estimates, and it also has a current yield of about 4%, which has been a key support level for many stocks. A 4% yield is about double the average yield of the S&P 500 Index and it has provided a level of support for other stocks due to interest from dividend investors.

4. Another reason the downside appears limited is because of the sum-of-the-parts and potential break-up valuation for the company. While the PC division is not seeing growth and is dragging the valuation down, it could either be spun-off or sold. The same could be true for the printer business, leaving HP with consulting and software divisions as well as some other hardware businesses that are experiencing growth. Furthermore, some investors and analysts believe that Oracle (NYSE:ORCL) might be considering a takeover bid for the entire company. This interest from Oracle could be in part due to Hewlett-Packard's acquisition of "Autonomy," which could allow it to better challenge IBM (NYSE:IBM) in the software market.

In summary, it is not surprising to see continued weakness in HP shares right now as tax loss selling provides shorts with a temporary and seasonal opportunity to continue attacking the stock. However, investors should ignore the fear and consider going contrarian by using weakness to buy, especially since the end of tax loss selling in January could give the stock a chance to show real strength.

Key Data Points For Hewlett-Packard From Yahoo Finance:
Current Share Price: $13.14
52-Week Range: $13.07 to $30
Dividend: 53 cents, which provides a yield of 3.9%
2012 Earnings Estimate: $4.04 per share
2013 Earnings Estimate: $3.53 per share
P/E Ratio: about 4 times earnings

Key Data Points For Oracle From Yahoo Finance:
Current Share Price: $30.02
52-Week Range: $24.91 to $33.29
Dividend: 24 cents per share, which yields .8%
2013 (Fiscal Year) Earnings Estimate: $2.65 per share
2014 (Fiscal Year) Earnings Estimate: $2.91 per share
P/E Ratio: about 12 times earnings

Data sourced from Yahoo Finance. No guarantees or representations are made. Please consult a financial advisor before making investments.

Source: Don't Be Afraid To Buy Hewlett-Packard At 4 Times Earnings