Cisco Out of the Gutter but Downtrend Looms

When I made the case for buying CSCO after its earnings disaster in November, I was bracing myself for an extended stay at or near 52-week lows. I even planned to add more on a steep enough decline. After two weeks of slowly drifting downward, CSCO made a bottom. The stock is now climbing out the gutter and battling its way back into November’s post-earnings gap.


Cisco is slowly recovering but still in a downtrend
Cisco is slowly recovering but still in a downtrend

*Chart created using TeleChart:

Notice that Cisco is still stuck in a downtrend marked from the April, 2010 highs. The stock also has a critical test of looming, overhead resistance form the 200-day moving average (DMA). So, despite the upside “catch-up” potential, I do not expect an easy road forward to recovery.

Be careful out there!

Full disclosure: long CSCO

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