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Cicso Ready To Break Through?

ByDragonfly Capital
AuthorGregory W. Harmon
Published 05/17/2013, 02:12 AM
Updated 05/14/2017, 06:45 AM
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The last time Cicso (CSCO), was a popular stock this song was hitting its stride. But following the Dot com crash it has been in a rut trading nearly exclusively between 12 and 26 for 10 years. Many are excited about large cap tech companies now though and with their earnings report last week, Cisco jumped 12.6% Thursday. Could it be time to break that channel? Let’s take a look.

CSCO - 1
The daily chart above shows that heading into earnings it was stalling near completion of a bearish Butterfly, but also trying to break above a Diamond Consolidation. The Diamond prevailed and the move Thursday to 23.89 is still short of the target of 25.40 on the pattern break. The gap up leaves a big open window below and with the Relative Strength Index (RSI) now technically overbought but the Moving Average Convergence Divergence indicator (MACD) is rising and the volume was huge.

With some consolidation in this area the RSI can work off and it will look attractive. But what about a longer term scale? The monthly chart below looks good. It is moving out of consolidation higher, and over the Simple Moving Averages (SMA) with the MACD starting to rise.
CSCO - 2
These are all positives for the stock. The RSI is rising as well. It still has the hurdle at 26 and then 32.50 to get over before you can set it and forget it, but it is looking up. Over that 32.50 area and the upside targets move higher very quickly with 53.40 and then 67. Maybe the Cisco Kid will be your friend again soon.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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