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It may be in a dying business but here's why it's a great stock: Strategists

PC sales are declining. So, why is Hewlett-Packard doing so well?

PC sales shrank in 2013. However, one of the world's largest PC-makers, Hewlett Packard, was the best performing stock in the Dow Jones Industrial Average (well, until it was booted in September). Up 98% in 2013, it's up an additional 6% since the start of 2014.

At first blush, that shouldn't be the case. After all, PCs are under siege. According to recent data from Gartner, worldwide PC sales shrunk 6.9% in the fourth quarter versus the same time in 2012. This makes it the worst decline in PC sales history.

To be sure, some companies like Dell and Lenovo saw growth above 6% in the last quarter but some other major vendor suffered big losses. Acer's sales were down 16% compared to the fourth quarter of 2012 while ASUS sold 19% fewer units. Hewlett-Packard, the second largest PC-maker, saw a 7.2% falloff.

To make matters worse, Microsoft's latest operating system, Windows 8, is irritating PC consumers. It's gotten so bad that Hewlett-Packard is now selling its new computers loaded with Windows 7. "Back by popular demand," proclaims HP.com's front page.

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"I think it's a smart move," says Jason Rotman, managing partner at Lido Isle Advisors. Rotman likens HP's latest move as an example straight out of former Princeton basketball coach Pete Carril's book, "The Smart Take from The Strong."

"Hewlett-Packard is the smart trying to take from the strong," says Rotman. "They're doing something out of the box."

Rotman is as much a fan of the stock as he is of the Princeton Tigers. Rotman sees Hewlett-Packard's stock headed to the upper ends of the $30 range in 2014.

Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, also thinks HP's stock is a buy based on the technicals.  

"I absolutely love this chart," says Ross, "not just because I like the stock but because the picture is so clear here that it's almost as if it were taken right from a textbook."

(See: CNBC's Technology coverage)

Ross sees the stock at a critical inflection point now that it has broken above its 200-week moving average for the first time in almost three years. As well, it looks as if it will break what Ross believes is a multi-year head and shoulders pattern at the $30 level. A break above the point could see the stock hit as much as $48, says Ross.

"Strength begets strength," says Ross. "This is a strong chart that I would be a buyer of."

To see more analysis of Hewlett-Packard by Rotman on the fundamentals and Ross on the technicals, watch the video above.

More from Talking Numbers:

Why we could see a market correction in February
Dan Loeb just bought $1.3 billion worth of stock in this company
This could be a major problem for Apple

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