Dell's Miss: Good News for HP (DELL, HPQ)

Includes: DELL, HPQ
by: Philip Davis

I'm really liking the look of HP (NYSE:HPQ) options (5/16). HP doesn't give away shipping, HP doesn't have to send out a billion flyers a month, HP doesn't throw cheap monitors and printers in with purchases or give cheap memory upgrades, HP doesn't have to hire their own salespeople to sell every single customer a computer, HP doesn't have to service and support every single computer they sell, HP has a profitable little printer business on the side and HP did not issue a warning!!!

Now that Dell (NASDAQ:DELL) has lowered the bar, HP will not even have to beat so let's see how today's retest of the 50 dma of $33.25 goes, and look to take advantage of the Jun $35s options which already were a 50% gainer for us when we bought them for .65 a week ago.

Dell's weak earnings indicate that they will not be pushing for a price war with HP. And HP does not depend on the Asian markets where Lenovo is applying pricing pressure to Dell.